Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

LONDON COUNTY COUNCIL (GENERAL POWERS) BILL [Lords] (By Order)

Second Reading deferred till Wednesday next.

PETITION

Post Office, Mowmacre Hill, Leicester

Sir B. Janner: I beg to ask leave to present a Petition on behalf of my constituents in the section of my constituency known as Mowmacre Hill. My constituents in that area are very seriously disturbed at the lack of proper services by way of post offices in that district. They have for a very considerable time endeavoured without success to impress upon the Minister how essential it is that the aged persons in that district should have adequate post office facilities instead of having to travel up and down very hilly ground to obtain their pensions.
There are, of course, a large number, too, of younger people who have to take their children with them in order to visit post offices at too long distances—unreasonably long and hilly distances—as otherwise they would be prevented from obtaining the payments that have to be made to them.
In the circumstances, they feel terribly perturbed about the whole matter, and they ask that the humble Petition of these citizens should be presented. The Petition says that considerable hardship is caused to the residents on the Mowmacre Estate, and especially to the aged, by the lack of sufficient postal facilities and particularly by the inconvenient siting of the nearest post office at the bottom of the steep hill.
Wherefore your Petitioners pray that provision may be made for the establishment of an additional sub-post office on the Mowmacre Estate.
And your Petitioners, as in duty bound, will ever pray, etc.

To lie upon the Table.

Oral Answers to Questions — AGRICULTURE, FISHERIES AND FOOD

Forestry (Chipboard Industry)

Sir W. Bromley-Davenport: asked the Minister of Agriculture, Fisheries and Food, in view of the fact that over £118 million of public money has been expended on the development of forestry in this country, what specific steps are being taken by the Government to encourage the expansion of the chipboard industry in this country, with a view to absorbing the rapidly increasing output of forest thinnings and reducing the large import bill for chipboard and other similar building and furniture boards.

The Minister of Agriculture, Fisheries and Food (Mr. Christopher Soames): The Forestry Commission encourages the expansion of the chipboard and other timber using industries, by giving advice and information on the availability and location of supplies of home grown timber. The Forest Products Research Laboratory is co-operating with the British Chipboard Manufacturers Association in research on manufacturing processes. The rate at which home grown timber using industries as a whole have in fact expanded over the last few years is encouraging.

Sir W. Bromley-Davenport: In view of the growing economic importance of this matter, would my right hon. Friend consider convening at the earliest possible date a top-level conference of all the interests concerned to try and find a solution?

Mr. Soames: If that would be helpful, I will, of course, consider it. I think that my hon. and gallant Friend might like to know how the consumption of home-grown timber by the paper-pulp and the board manufacturing industries has expanded. In 1955 there were 2·5 million hoppus feet taken; in 1958 there were 5 million; in 1960 there were 10 million, and we estimate that by 1963 that figure will be up to 16 million, so it is progressively expanding very satisfactorily.

Toxic Chemicals

Sir Richard Glyn: asked the Minister of Agriculture, Fisheries and Food whether he is satisfied with the pace at which investigations are being con ducted as to the possibility of danger arising from the use of toxic chemicals for agricultural purposes; when he now expects the report of the study group to be completed; and if he will make a further statement.

Mr. Soames: Much research is being done into the effects of toxic chemicals on human and animal life and on crops. Before any chemical is cleared for use in agriculture, thorough investigations are carried out on it. The Research Study Group was set up to see what further research may be necessary into the effects of these chemicals. Its report is expected this summer.

Sir Richard Glyn: Is my right hon. Friend aware that this is a matter of great public concern and that farmers, seed merchants and all concerned are anxious to know which, if any, of the seed dressings in use are dangerous? Is he also aware that analysts have identified substantial quantities of dangerous chemicals in the flesh of game birds found dead and considerable quantities in game birds found alive but stupefied and which could possibly be used for human consumption? Is my right hon. Friend still further aware that great quantities of seed will be dressed in the near future for sowing this autumn, and will he see that the matter is treated as one of extreme urgency?

Mr. Soames: I am well aware of the concern which is felt, and I share it very much myself. I am hoping that this report will be forthcoming soon—it will certainly be forthcoming this summer—and before that we shall, of course, be getting the report of the survey on the question of birds to which my hon. Friend referred and which comes up in the next Question.

Mrs. Butler: asked the Minister of Agriculture, Fisheries and Food what research he is at present undertaking into the desirability or otherwise of using dieldrin, aldrin and heptachlor in dressings for spring-grown grain; and what restrictions he intends to put upon the use of these chemicals in agriculture.

Mr. Parker: asked the Minister of Agriculture, Fisheries and Food whether he is aware of the continuing disquiet at the increasing destruction of wild bird life as a result of the use of poisonous seed dressings and toxic sprays; and whether he will take urgent action to deal with the problem before the autumn planting.

Mr. Soames: I share the concern felt about the reported casualties to wild life from certain seed dressings. Research work has established the value of dieldrin, aldrin and heptachlor in the control of serious insect pests such as wireworm and wheat bulb-fly. Present research is directed at studying their effects on wild life and their long-term effects on the general soil fauna. A nation-wide survey is being carried out this spring of reported cases of unusual deaths among birds. Decisions on whether restrictions are necessary on the use of these chemicals will be taken when the results of the survey, including analytical evidence, are known and have been reviewed at a meeting later this month with all interested organisations including the bird preservation societies.

Mrs. Butler: I thank the right hon. Gentleman for that reply. Does he appreciate that the deaths of thousands of birds and small animals this spring provided a very disturbing commentary on the present situation? Can he say whether, as a result of the survey and the meeting which he proposes to hold, it will be possible to bring in regulations, if they are considered necessary, before the autumn sowing takes place?

Mr. Soames: This survey arose out of a meeting which was held last autumn, as the hon. Lady will remember, with all the interested societies. At that meeting it was agreed that we should move forward on two lines. One was to set about an educative programme to ensure that merchants and farmers were aware of the inherent risks involved in an unnecessary use of these chemicals. The second was that this spring—and this is what is going on now—a survey would be made. I think that the hon. Lady will agree that it would be best to await the results of the survey which, in the nature of things, cannot be completed until the end of this month, because there are still the after-effects of the spring sowings to be considered. Of course,


it will be my intention to proceed as quickly as possible once the report of the survey has been received at the end of this month.

Sir J. Duncan: Has consideration been given to the difference between liquid dressings and dust dressings, as in Scotland it is thought that liquid dressings, which stay in the grain, are more dangerous than dust dressings which may be blown off grain left on the surface?

Mr. Soames: Yes, Sir. That is one of the matters which is being considered.

Mr. de Freitas: Will the right hon. Gentleman consider the point about the timing which was made by my hon. Friend the Member for Wood Green (Mrs. Butler)? What is important is that we should know before the autumn comes.

Mr. Soames: Yes, Sir. At the same time as we are awaiting the survey on the spring dressings we have to consider the effect of autumn sown corn on wild life. That is not necessarily the same as with the spring sowing.

Sir G. Nicholson: Is my right hon. Friend aware that, notwithstanding what he said, the fact remains that in some parts of the country whole species of birds and animals are probably being exterminated for ever? Is he further aware that he will not be forgiven by posterity, nor by this generation, if any complacency should lead to a recurrence of what has happened in this spring in another sowing season?

Mr. Soames: I assure my hon. Friend that there is no question of complacency. All I am saying is that before we decide what should be done we must see the results of this survey which, serious as I think it will be, will not go to the extent of showing extermination of certain types of birds, as my hon. Friend suggested. But in saying that I do not in any way underrate the importance of this matter.

Horticulture (Dutch Auction System)

Mr. de Freitas: asked the Minister of Agriculture, Fisheries and Food what further study he is making of the advantages to both the grower and the consumer of horticultural produce of the system of co-operative clock auctions

which has been used in the Netherlands for eighty years and which is now being applied and developed in France and Germany.

Mr. Soames: It is for producers and traders handling horticultural produce to take the initiative in working out the most satisfactory method of conducting sales. Much interest is being shown in the Dutch auction system by many sections of the horticultural industry, and I understand that an announcement about the setting up of an experimental auction is to be made later today. My Department will be glad to give any advice and help it can.

Mr. de Freitas: Does the Minister realise that the costs of the Dutch auction system—the clock auction system—are about 2 per cent. compared with 10 per cent. for auctions in most parts of this country? In view of the enormous advantages to both consumer and producer, will the Minister use some of the money which Parliament has voted to encourage the use by co-operatives of the Dutch system?

Mr. Soames: The advantages cost-wise of this system were undoubtedly one of the features which led the organisation concerned to reach the conclusion which I announced in my Answer. The only funds we have available to us by Statute at present are those which can be contributed to the Horticulture Marketing Council and beyond that at present I could not go; but I take the hon. Gentleman's point.

Fisheries (Faroes)

Mr. Hector Hughes: asked the Minister of Agriculture, Fisheries and Food if he will make a comprehensive statement on the dispute arising from the present claims by Faroes fishermen in so far as they affect the British fishing industry, with special relation to Scottish fisheries.

Mr. Soames: We have had no approach from the Danish Government on this matter and I therefore have no statement to make.

Mr. Hughes: Will the Minister realise that the urgency of this matter is emphasised by the shooting up within the last few days by a Danish gunboat of


an Aberdeen fishing trawler? Will he realise the urgency before some tragic event occurs? Will he take steps to ensure that this longstanding dispute can be settled by non-violent means without shooting up Aberdeen trawlers, so that outstanding differences can be settled on the basis of law and justice rather than violence?

Mr. Soames: It is the hope of both sides of the House that these questions will be dealt with by peaceful methods. What has happened in this case is an alleged infringement of the existing arrangements by a trawler. It is not a question of a dispute between Governments about fishing limits or anything else, and no approach has been made by the Danish Government to Her Majesty's Government on this matter.

Oral Answers to Questions — TRADE AND COMMERCE

Books (United States Import Duty)

Mr. G. M. Thomson: asked the President of the Board of Trade what representations are being made to the United States Government regarding the duty at present imposed on the import of British books.

The Minister of State, Board of Trade (Mr. F. J. Erroll): The United States Government have signed a U.N.E.S.C.O. Agreement on the import of educational materials, which includes provision for duty-free import of books. Legislation which would enable them to ratify and implement this Agreement is at present before Congress.

Mr. Thomson: I thank the Minister for that reply. Will he bear in mind that the American Government is the only Western Government at present imposing any duties on books and that it is now two years since the American Government signed that U.N.E.S.C.O. Convention? Will the Government press the United States Government to introduce the necessary legislation quickly and get the necessary administrative steps taken to remove this barrier?

Mr. Erroll: I do not think that we should do anything more now, as legislation is at present before Congress.

Coal and Steel Imports

Mr. Wyatt: asked the President of the Board of Trade what regulations he has made regarding the import of coal and steel; and on what principles they are applied.

Mr. Erroll: The general policy of Her Majesty's Government is to refrain from using import controls for the purpose of restricting imports. Coal and a few other limited categories of goods are nevetheless still controlled by import licensing. Steel is at present on open general licence from all sources.
As regards coal imports, I have nothing to add to the Answer given by my right hon. Friend the Minister of Power on 15th May.

Mr. Wyatt: Does that mean that the Government have not yet decided whether the Steel Company of Wales should be allowed to import coal from America? Is it not the case that steel is protected by a 10 per cent. tariff and that coal is not? Is it not, therefore, unreasonable to allow the import of coal to compete with British coal, unprotected by a tariff, whereas steel cannot be imported in the same way?

Mr. Erroll: I should like the hon. Gentleman again to read what my right hon. Friend the Minister of Power said on 15th May. He said:
Because of the importance of the issues involved, I do not expect to make an early statement about the Government's policy on coal imports."—[OFFICIAL REPORT, 15th May, 1961; Vol. 640, c. 899.]
I have nothing to add today on that subject.
Steel imports are on open general licence from all sources, subject generally to a tariff of 10 per cent. or alternative specific duty, but there are one or two temporary exemptions.

Mr. Wyatt: In making this decision, will the Government bear in mind that steel is protected by a 10 per cent. tariff? It is all very well to say that the National Coal Board can import steel if it likes, but it cannot do so on the same favourable terms as the Steel Company of Wales can import coal.

Mr. Erroll: I regret that I do not quite follow the hon. Gentleman's reasoning but I will study in HANSARD what he has said.

Exports to China

Mr. Rankin: asked the President of the Board of Trade what percentage of total United Kingdom exports to China in 1960 was of goods on which there was an embargo for shipment to that destination prior to May, 1957; and what was the value represented by these exports.

Mr. Erroll: The figures requested are not available because items, the export of which to China was formerly embargoed, are in many cases contained in statistical groupings with items not formerly embargoed.

Mr. Rankin: Is it not the case that since the differential embargo on China was removed, exports of steel, for example, have risen from £740,000 to £5 million worth and that the increase in non-ferrous metals has been from £60,000 to £9 million? Does the right hon. Gentleman recollect that in the recent debate on East-West trade he said:
When the China list was brought into line with the Russian bloc list, it did not lead to a great upsurge in trade with China in items which had been previously banned?"—[OFFICIAL REPORT, 24th April, 1961; Vol. 520, c. 97.]
Do not these figures show that there was a great upsurge? Should not the right hon. Gentleman take greater credit for that than he is doing, and will he not go a small step further and try to follow the good lead set by Canada?

Mr. Erroll: In the debate I was speaking in general terms about Anglo-Chinese trade. I was aware, of course, that there had been a considerable increase in the export of copper rods, for example, and in other goods which had been banned, as well as a certain increase in steel, but, speaking generally, trade has steadily and uniformly increased.

Films (Exhibition)

Mr. Swingler: asked the President of the Board of Trade if, in view of the continued decline of the cinema trade, the importance of maintaining British film production, the dominating positions of the two major circuits, and the need to counteract monopolistic tendencies in the industry, he will convene a representative conference of persons engaged in the production, distribution, renting, and exhibition of films to discuss the establishment

of an additional and effective national circuit of cinemas which would offer producers, independent exhibitors and the public a greater variety of choice.

Mr. Erroll: No, Sir. Should my right hon. Friend be asked by the representative organisations in the industry to convene a conference he will of course consider the request.

Mr. Swingler: Is the right hon. Gentleman aware that there are very few representative organisations left in the industry and that, if it goes on being streamlined any further, there will be only one? Is he aware of the considerable problem which now exists in that, because of the closure of cinemas and the rationalisation of the cinema trade, a handful of men can kill any film produced by the simple method of refusing it a circuit booking? Does he not know of the complaints by producers about this more or less monopolistic state of affairs and has he no responsibility to do something about it?

Mr. Erroll: There is a substantial degree of competition between the two circuits, for a start. Despite the decline in the number of cinemas, British film production has remained at about the present level for some time, so that plenty of British films are being produced and are being successfully shown.

Portuguese East Africa (Ports Railways Transport Department)

Sir W. Bromley-Davenport: asked the President of the Board of Trade with regard to the notice in the Export Service Bulletin of 10th April about tenders invited by the Ports Railways Transport Department of Portuguese East Africa, why there was a delay of three weeks in supplying his Department's list of forty firms willing to submit tenders on behalf of British manufacturers; whether he is aware that the list included firms not in a position to submit tenders; and whether he will ensure that full and early details are given to inquiries about matters of such importance to United Kingdom export trade.

Mr. Erroll: My Department has special arrangements for dealing with inquiries about tenders which normally work entirely satisfactorily and expeditiously. The


delay in this particular case, which I greatly regret, was due to an unfortunate series of human errors.
As regards the second part of the Question, the list supplied by my Department made it quite clear that it was a list of firms qualified to tender but that some of the firms listed might be unable to do so because of other commitments. These would not normally be known either to my Department or to the Commercial Officer at the overseas post. The completion of agency arrangements must of course be a matter for firms themselves.

Sir W. Bromley-Davenport: Is my right Hon. Friend aware that, as a result of this delay, large export orders may have been lost? Is he further aware that this is not the only incident of its kind which has happened, and will he look into the matter?

Mr. Erroll: I am very sorry that this error occurred and we are doing our best to ensure that it will not happen again. The firm concerned could have helped us by sending its request to the address given in the particular issue of the Export Services Bulletin instead of to our regional office. However, we are taking steps to ensure that mistakes of this kind do not, so far as is humanly possible, recur.

Industrial Sites, Bishop Auckland

Mr. Boyden: asked the President of the Board of Trade how many industrial sites are now available for factory building in the area of the Bishop Auckland Urban District Council.

Mr. Erroll: Four.

Mr. Boyden: Can the right hon. Gentleman say whether these sites include the three discussed by Bishop Auckland Council with the Parliamentary Secretary when he visited Durham in December, 1960?

Mr. Erroll: The four sites were West Auckland, Fylands Bridge, Tindale Crescent, and the Co-operative Bakery site.

Mr. Boyden: Can the right hon. Gentleman tell me about the Auckland Park site and whether it has been surveyed satisfactorily?

Mr. Erroll: I shall have to look into that and let the hon. Member know.

Mr. Boyden: asked the President of the Board of Trade what proposals have been submitted to him since the passing of the Local Employment Act for the improvement of industrial sites within the area of the Bishop Auckland Urban District Council.

Mr. Erroll: None, Sir.

Mr. Boyden: Is not this a comment on the misleading promises which the Government made when the Local Employment Bill was being discussed? Many of us were under the impression at that time that a great deal of activity would take place in cases where there is a great deal of industrial filth left about on sites? Could not the right hon. Gentleman take the initiative with the local council and with the Ministry of Housing and Local Government with a view to putting some of these sites right?

Mr. Erroll: The Bishop Auckland Urban District Council has not made any application to the Government, but we should be very glad to consider any applications which are submitted.

Oral Answers to Questions — NATIONAL FINANCE

Civil Service (South African Nationals)

Mr. J. Wells: asked the Chancellor of the Exchequer if he will give an assurance that South African Nationals who are British civil servants will be able to continue their employment without being compelled to apply for British nationality.

The Financial Secretary to the Treasury (Sir Edward Boyle): Yes, for the time being; but their ultimate position will depend on whatever changes may be made in the British Nationality Act, 1948, or by other legislation, to deal with the situation arising from the Union of South Africa becoming a Republic outside the Commonwealth.

Mr. Wells: While I am grateful to my hon. Friend for his general remarks, may I point out that it is important that these very few people should be given an assurance that they may continue safely in their employment? In reply my hon. Friend said that ultimately it will depend


on changes that may be made, but these people need an assurance that their jobs are safe.

Sir E. Boyle: I do not think that I can go beyond what I said in my original Answer. I think that is all the assurance one can give in present circumstances.

Mr. Storehouse: Is it not the case that we should expect primary loyalty to the United Kingdom?

Sir E. Boyle: I do not want to get too deeply involved in this. The point is that under present legislation aliens can be employed in the Civil Service only in a temporary capacity and subject to certain statutory limitations. Of course, we shall consider all these questions when considering what the ultimate position in connection with South Africa will be, but I do not think I can go beyond what I have said this afternoon.

Nationalised Industries (Capital Development)

Mr. Ridsdale: asked the Chancellor of the Exchequer for how much physical investment on account of capital development the nationalised industries were responsible in 1959 and 1960, respectively; and what proportion on average this bears to the total capital formation in industry in those years.

The Economic Secretary to the Treasury (Mr. Anthony Barber): Gross fixed capital formation by the nationalised industries amounted to £794 million in 1959 and £800 million in 1960. These figures were respectively 31·5 per cent. and 29·0 per cent of the gross fixed capital formation in those years in industry in the United Kingdom.

Mr. Ridsdale: Is my hon. Friend satisfied with the returns we are getting from the large amount of capital employed in nationalised industries? Can he say how it compares with that employed in private industry? Is not one of the causes of the lack of growth or poor growth in the economy the lack of productivity of the capital employed in nationalised industries?

Mr. Barber: Of course, my hon. Friend will know the proposals in the recently published White Paper on the economic and financial obligations of the nationalised industries, which are de-

signed to reduce the risk that those industries might absorb too much of our investment resources. On the other hand, in view of the latter part of his Question, it is a fact that growth in these basic industries, which minister to other sectors of the economy, must be adequate for that purpose. What we are trying to ensure is that the proportion is right.

Mr. Jay: Do not the figures given by the Minister suggest that one cause of the lack of growth in British industry is that investment in private industry has not come up to the record of that in public industry in recent years?

Mr. Barber: I would not accept that. I should have thought that in productive investment British industry had a good record last year and the prospects for this year are also very good.

Purchase Tax

Sir B. Janner: asked the Chancellor of the Exchequer on how many occasions his power has been used during the past five years to increase or decrease Purchase Tax by Order between Budgets.

Mr. Barber: Sixteen; thirteen of the Orders were for additions to the exempt list of essential drugs and medicines.

Sir B. Janner: Would the hon. Gentleman say how these powers will now be related to the new powers being taken in regard to all forms of Customs and Excise duties in periods between Budgets?

Mr. Barber: The existing power to which the hon. Member's Question referred has been used only either for dealing with the exempt list of essential drugs and medicines, or for clearing anomalies of classification, whereas the power which the Chancellor seeks in Clause 8 of the Finance Bill is for an entirely different purpose. I gather, Mr. Speaker, that we are likely to be considering that later today.

Mr. Gresham Cooke: Ought not these powers to alter Purchase Tax to be taken more frequently than sixteen times in the last five years? Before every Budget there is a hold-up in the selling of goods while people are considering whether Purchase Tax is to be altered. Should not these alterations take the public unawares and be made not at Budget time?

Mr. Barber: That, I think, raises a wider question. It has certainly been considered by my right hon. and learned Friend and his predecessors on a number of occasions, but they have reached the conclusion that, generally speaking, it is better to make any changes in Purchase Tax of a specific nature at Budget time. Consequently, the power referred to in the Question has been used only for dealing with anomalies or with this special case of the exempt list of essential drugs and medicines.

Universities, Scotland (Expansion)

Mr. Rankin: asked the Chancellor of the Exchequer how much of the £25 million required to expand existing universities in Scotland to meet the estimated demand for new places by 1970 has been approved.

Sir E. Boyle: Of the new building programmes for the period 1962–65 which my right hon. Friend announced on 25th January the University Grants Committee has to date allocated about £9·3 million to the five Scottish institutions.

Mr. Rankin: Does the hon. Gentleman realise that, even if we get the £25 million which is suggested to extend Glasgow, Edinburgh, St. Andrews and Aberdeen Universities to their full capacity as proposed, Scotland in 1970 will still be nearly 2,000 university places short of the estimated demand? Is that what the Chancellor is planning for? Would not the hon. Gentleman ask him to reconsider this matter?

Sir E. Boyle: I am told that, so far as can be foreseen at present, the programmes which my right hon. and learned Friend has already announced or the Scottish universities and also for the Royal College of Science and Technology in Glasgow—

Mr. Rankin: That is not a university.

Sir E. Boyle: No, but also for the Royal College of Science and Technology—will accommodate the increased number of students which will be coming forward in this decade.

Mr. Rankin: On a point of order. In view of the exceptionally inaccurate information—[HON. MEMBERS: "Order."]—contained in that reply, and my dissatisfaction with it, and the dissatisfaction—

Mr. Speaker: I have repeatedly asked hon. Members in giving notice not to make speeches but to adhere to the formula.

Mr. Rankin: I realise that I have not yet got the Adjournment. I beg to give notice that I shall raise this matter on the Adjournment.

Oral Answers to Questions — HOME DEPARTMENT

Cruelty to Animals Act, 1876

Mr. P. Browne: asked the Secretary of State for the Home Department how many visits by inspectors were carried out during the year 1960 under the Cruelty to Animals Act, 1876; and how many people held licences to experiment on animals during that period.

The Minister of State, Home Office (Mr. Dennis Vosper): During 1960 the inspectors made 1,506 visits to the 528 places registered for experiments under the Act; 6,872 people held licences, but of these 1,989 performed no experiments during the year.

Mr. Browne: Does my right hon. Friend consider that five inspectors are sufficient to carry out this work in view of the fact that, I understand, more than 3 million separate experiments were carried out in 1960?

Mr. Vosper: My right hon. Friend has just authorised the appointment of an additional inspector. The purpose of the inspectorate is not to supervise each and every experiment, but to ensure that those who carry out the experiments understand their responsibilities. This, I believe, has in fact happened.

Immigration from the Commonwealth

Mr. N. Pannell: asked the Secretary of State for the Home Department if he will, as a matter of urgency, appoint a small fact-finding committee to examine the question of immigration from the Commonwealth.

The Secretary of State for the Home Department (Mr. R. A. Butler): I do not think the appointment of such a committee is called for as adequate factual information is already available.

Mr. Pannell: In view of the increasing gravity and complexity of this problem, with immigrants flooding into this country from every quarter of the Commonwealth in ever-increasing numbers, does not my right hon. Friend consider that there is urgent need for an impartial assessment of the position as a prelude to positive Government action?

Mr. Butler: I think that we have published in HANSARD nearly all the figures which are up to date and which are rightly described by my hon. Friend as causing a certain degree of anxiety and consideration. I do not think that a committee could produce many more facts for the consideration of the Government than we have been able to give the House.

Miss Bacon: Is it not strange that hon. Members opposite always raise the question of immigration from the Commonwealth? Can it be that they are more concerned about the colour of the immigrants than the numbers of those coming in?

Mr. Butler: I think that we all agree that if there is to be anything done on these lines in this very difficult situation it would have to be quite regardless of the question of colour.

Mr. Pannell: Is my right hon. Friend aware that 95 per cent. of the inhabitants of the Commonwealth coming to this country are coloured and that any legislation introduced must appear to apply to coloured people in these circumstances?

Mr. Butler: I think what is important is that to preserve absolute rectitude on this it should not be designed to deal specifically with the question of colour.

Mr. G. M. Thomson: Would the right hon. Gentleman agree that every time his hon. Friends ask a Question about this matter it tends to increase the flow of immigrants from the West Indies, anxious to get here before restrictions are imposed? Could he not ask his hon. Friends to stop asking such a flood of Questions?

Mr. Butler: I cannot restrict the number of my hon. Friends or hon. Members opposite asking what Questions they wish to ask. I think that we must be a

little careful about the encouragement of further numbers of immigrants at present.

Mr. Gresham Cooke: asked the Secretary of State for the Home Department whether, in view of estimates now being made that the number of immigrants may reach 150,000 this year, he will arrange for controls requiring a deposit of the return fare from immigrants on arrival.

Mr. R. A. Butler: The issues raised by immigration from the Commonwealth are under constant study by Her Majesty's Government, but I have no further statement to make at present.

Mr. Gresham Cooke: Does my right hon. Friend appreciate that, while of course a great many immigrants are doing a very good job in this country, a large number of cases have been brought to my attention recently of immigrants who come here and, for some reason or other, cannot get a job and therefore go on to National Assistance? Will he take that point into consideration when considering whether they ought to deposit the return fare?

Mr. Butler: I shall certainly take that into consideration. My right hon. Friend the Minister of Labour keeps me fully informed about the degree of unemployment existing among immigrants.

Hungarian Nationals

Mr. Spriggs: asked the Secretary of State for the Home Department how many Hungarian nationals have left the United Kingdom to return to their home land; and what is the total number of young people and adults who have been refused permission by him to return to Hungary; and if he will make a statement.

The Joint Under Secretary of State for the Home Department (Mr. David Renton): Some 2,000 Hungarians who came here as refugees in 1956 have returned home. I know of only one case—that of a child of 14 who was made a ward of court last September—in which permission to leave this country was refused.

Mr. Spriggs: May I appeal to the Minister to remove any obstructions placed in the path of those people who wish to return home?

Mr. Renton: There is no obstruction placed by Her Majesty's Government. The case of a ward of court was a refusal by the court. It is for the Hungarian Government themselves to grant travel documents which will enable people to return to Hungary.

Juveniles (Crimes of Violence)

Mr. Gresham Cooke: asked the Secretary of State for the Home Department if he is now in a position to give the figures of crimes of violence against the person committed by juveniles during 1960 in the same form as set out in Appendix C of the Barry Report on Corporal Punishment.

Mr. Vosper: In 1960, 1,540 boys and 43 girls under the age of 17 were found guilty of offences of the kinds included in Appendix C.

Mr. Gresham Cooke: Would my right hon. Friend agree that that is an increase of about 14 per cent. over 1959 and that these figures of the increase in crimes of violence are causing much concern in the country at present?

Mr. Vosper: I think that my hon. Friend's calculation was not quite accurate. These figures are, of course, extremely disturbing. My right hon. Friend has already dealt with this in previous speeches.

Captain Galvao (Visa)

Mr. Stonehouse: asked the Secretary of State for the Home Department why a visa was refused to Captain Galvao.

Mr. Harold Davies: asked the Secretary of State for the Home Department if he will state why, when Captain Galvao was invited to visit Great Britain, he was refused a visa by the British Consul in Sao Paulo.

Mr. Renton: My right hon. Friend decided, after consultation with my noble Friend the Foreign Secretary, that it would be undesirable to allow Captain Galvao to visit this country.

Mr. Stonehouse: Why is the traditional policy of allowing free entry to political refugees being changed in this case? Why did the Home Secretary

allow General Delgado in while keeping his associate Captain Galvao out?

Mr. Renton: There is no question of a change in our traditional policy in this case, but I should tell the House that it has never been our tradition to allow foreigners to come here to advocate insurrection against our allies, which is what Captain Galvao apparently wishes to do.

Sir P. Agnew: Does not the refusal of a visa to this man to land here in fact constitute an act of mercy, because, if he had been able to come into the country, Her Majesty's Government, in discharge of their international obligations, would have had to arrest him on a charge of murder on the High Seas?

Mr. Renton: There is indeed an extradition treaty between this country and Portugal.

Mr. Harold Davies: Is the Minister aware that he has not yet given the reasons why a visa was refused to Captain Galvao? Is he further aware that Captain Galvao held a high position under Dr. Salazar, and that because of his courage in exposing the criminal conduct of the colonial system in Angola he lost his post? Even the Argentine Embassy gave him asylum in Portugal, and Brazil has done the same. Why has this country fallen behind on what it did for Garibaldi many years ago?

Mr. Renton: We can only judge his future intentions—that is, what he would do if he came here—by his recent activities, and I would remind the House that in the recent episode of the seizing of the "Santa Maria" by the armed group which he led there was a loss of life and wounding of the members of the crew who were unarmed and engaged in their lawful duties. We are also entitled to bear in mind the circumstances in which he wishes to come, namely, the fact that he wishes to give lectures, and by whom those lectures are sponsored.

Mr. S. Silverman: Will the hon. and learned Gentleman explain constitutionally exactly what the Secretary of State for Foreign Affairs has to do with this matter? Is not the discretion whether visas should be granted or not granted the personal discretion of the Home Secretary? Further, may I point out that,


if it were really the case that we never grant a visa to any alien who has been engaged in insurrection against his Government, not a single Hungarian refugee could have come here in the last four years?

Mr. Renton: That supplementary question raises a number of questions, but I think that the principal ones to answer are these. First, it is true that my right hon. Friend the Home Secretary has a discretion for the issue of visas, but when the issue of a visa might affect relations with a friendly foreign Power, it is right that be should consult my noble Friend the Secretary of State for Foreign Affairs.

Mr. Gordon Walker: May we be told what this gentleman intends to do which Garibaldi was not allowed to do in previous days in this country, or indeed many refugees from Hitler?

Mr. Renton: I think that the right hon. Gentleman's recollection of history will tell him that there is a considerable difference between the Portugal of today, which is a member of N.A.T.O., and the Italy of Garibaldi's time.

Several Hon. Members: rose—

Mr. Speaker: Order. We must get on with Questions.

Mr. Stonehouse: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest possible opportunity.

Prisoner (Member's Letter)

Mr. Dodds: asked the Secretary of State for the Home Department (1) why he has been unable to reply to matters raised in a letter from the hon. Member for Erith and Crayford, dated 30th November, 1960, referring to the case of Mr. Henry Scudder, now serving a sentence of nine years' imprisonment;
(2) why no further communication has been sent by him to the hon. Member for Erith and Crayford following his letter of 29th March in which he stated he was asking the Commissioner of Police for the Metropolis for details of the latest position as a consequence of

the full inquiry ordered by the Commissioner into the alleged innocence of Henry Scudder, and also into the complaints about police action.

Mr. R. A. Butler: The hon. Member has sent me on several occasions, beginning last November, material for consideration on behalf of this prisoner. As I informed him, I asked the Commissioner of Police to have inquiries made into the representations, and I am at present considering a report and other material on this case. I regret that I have so far been unable to send the hon. Member a final reply, but I hope to do so shortly.

Mr. Dodds: Is the right hon. Gentleman aware of the intense dissatisfaction felt by the mother, by the wife, and by other near relatives of this man? Can the right hon. Gentleman deny that I received no message at all from him, except a card, in reply to my letter of 30th November, until I wrote to him at the end of March? Did he not say at the end of March that a full inquiry had been held by the Commissioner, and that he was inquiring into the position? Does he not appreciate that this is now June, and that if it goes on like this the man will have served his nine years' sentence before anything is done? Can the right hon. Gentleman hurry matters?

Mr. Butler: I will certainly do my best to accelerate the procedure, but the case is very complicated and a great variety of inquiries have had to be made.

Oral Answers to Questions — REPUBLIC OF SOUTH AFRICA

President (Installation)

Mr. G. M. Thomson: asked the Secretary of State for Commonwealth Relations to what extent United Kingdom official representatives in the Union of South Africa participated in the ceremonies setting up the Republic of South Africa.

The Joint Under-Secretary of State for Commonwealth Relations (Mr. Bernard Braine): The British Ambassador, in company with the diplomatic representatives of other countries, attended the ceremonies in Pretoria connected with the installation in office of the new State President.

Oral Answers to Questions — EDUCATION

International Statistics

Mr. Swingler: asked the Minister of Education if he will put forward proposals to the European Ministers of Education, meeting under the auspices of the Council of Europe, for the production of more reliable comparative statistics about educational progress in European countries.

The Minister of Education (Sir David Eccles): I accept the need to improve international statistics on education, and my Department will continue to co-operate with agencies, such as U.N.E.S.C.O. and O.E.C.D., which are aiming to provide more reliable figures.

Mr. Swingler: Is the right hon. Gentleman putting forward definite proposals? Is he aware that whenever he quotes statistics from U.N.E.S.C.O. which are favourable to his record, apparently that is all right, but whenever we quote statistics from U.N.E.S.C.O. which are unfavourable to his record the Parliamentary Secretary to the Ministry of Education says that they are unreliable? Can he do something urgently about this?

Sir D. Eccles: I am not aware of that. It is true that it is very hard to make accurate comparisons between one country and another, but I think that as time goes on we may get things better.

Mr. Willey: Is the right hon. Gentleman aware that we are all very disturbed by a comparison made by my hon. Friend during a recent debate arising from figures he obtained from U.N.E.S.C.O.? Will the right hon. Gentleman assure us that his Department will do all it can the whole time to see that these disturbing figures are brought to our attention?

Sir D. Eccles: We have recently had a visit from the chief statistician of U.N.E.S.C.O. I hope that that may bring good results.

Temples, Abu Simbel

Sir Richard Pilkington: asked the Minister of Education what recent representations Her Majesty's Government has made to the United Nations Educational, Scientific and Cultural Organisation regarding the preservation of the Temples and Colossi at Abu Simbel.

Sir D. Eccles: None, Sir. The United kingdom is represented by Professor Emery on the U.A.R. Consultative Committee, which has been considering two alternative plans for the protection of the Abu Simbel Temples; and Sir Mortimer Wheeler is the British member of the International Action Committee of U.N.E.S.C.O. which is due to meet in Paris at the end of June.

Sir Richard Pilkington: Could not the British Government take more positive action in this matter in view of its importance for the future?

Sir D. Eccles: We are assisting diggings, which is I think perhaps the best thing we can do.

Oral Answers to Questions — EUROPEAN COMMON MARKET

Mr. du Cann: asked the Prime Minister if he will now make a further statement of Her Majesty's Government's policy with regard to British participation in the European Common Market.

The Prime Minister (Mr. Harold Macmillan): No, Sir. I have nothing to add to what I have already said in answer to recent Questions and what has been said by my right hon. Friend the Lord Privy Seal in the debate.

Mr. du Cann: Is my right hon. Friend aware that public opinion continues to be anxious on this subject? Although the economic implications of a British entry into the Common Market are largely understood, the political implications are not, and many people think that this decision whether to go into the Common Market is the gravest which Britain has had to make since 1939? In those circumstances, does not my right hon. Friend think that before far-reaching political arrangements are made there ought be some clear expression of opinion by the electorate either at an election or through a referendum?

The Prime Minister: Of course I would not deny what my hon. Friend says, but I have not at the moment anything to add to what has already been stated.

Mr. Biggs-Davison: asked the Prime Minister whether he will seek to arrange a special Commonwealth conference to work out the conditions under


which all Commonwealth countries could be closely associated with those of Europe.

The Prime Minister: As the interests and circumstances of the various countries of the Commonwealth differ so much from those of each other and from those of the countries of Europe, I doubt whether a conference directed to the object which my hon. Friend has in mind would be fruitful.

Mr. Biggs-Davison: Are not the grave anxieties of New Zealand and Canada and the Afro-Asian Commonwealth well founded? Is it not true that the expansion of population and markets in the Commonwealth would be far greater than those of Europe? Is it not quite insufficient for the Government to seek to negotiate to maintain current levels of Commonwealth exports to Britain and Europe, and should not the Government rather seek to make good the years of neglect of Commonwealth trade, refashion the thirty-year-old and eroded system of Commonwealth preference and thus come to mutually advantageous terms in Europe?

The Prime Minister: What I was saying was that my hon. Friend had suggested a conference. I think that it would be much better dealt with by careful consultation with each Commonwealth country separately, because they vary so much in what happens to be their major interest. That is the point that I was trying to make.

Mr. M. Foot: Is it not the case that, whatever may be the variations in the economic interests of different countries of the Commonwealth, all the countries of the Commonwealth have a common interest in the political implications of entry to the Common Market? For that reason, should not the Prime Minister try to decide a general Commonwealth policy?

The Prime Minister: That is another point, but it is not the point which, I think, my hon. Friend had mainly in mind.

Mr. Biggs-Davison: asked the Prime Minister whether, in view of recent Government statements on the United Kingdom's future relations with Continental Europe, he will give an assurance that the Government will not seek

to surrender, merge or limit the sovereignty of Parliament by the transfer of control, without time limit or power of withdrawal, over the economic or other policies of the United Kingdom to any supranational or international body.

The Prime Minister: I have already made it clear that we cannot sign the Treaty of Rome without negotiation about the commitments we would be required to undertake. What degree of surrender of sovereignty might be involved would depend on the nature and extent of these commitments. But full membership of the European Economic Community would inevitably involve some limitations on our sovereignty and freedom of independent action in those fields covered by the Treaty. This general principle has, of course, been accepted by all the present members of the Community. What would be of equal concern to us would be how the general principle was translated into specific obligations.

Mr. Biggs-Davison: Since the Commonwealth partnership is based on national sovereignty, would my right hon. Friend agree that it would be unthinkable for Britain to be merged in a federal union which would split the Commonwealth and frustrate a larger association between a greater Europe and the expanding Commonwealth?

The Prime Minister: This is a question of how far any treaty—and, of course, all treaties involve some derogation of sovereignty—on the purely commercial and economic aspects involves a derogation of sovereignty and how far we would be prepared to accept it. All those must be matters of negotiation and consideration.

Mr. Thorpe: Is the Prime Minister aware that the Treaty of Rome was signed over four years ago? Is he aware that the Lord Privy Seal said that the extent of the Government's activity was exploration? May we know when the Government will cease to explore facts which most other people know and get down to negotiation?

The Prime Minister: The hon. Member and his hon. Friends have the very simple view about this matter that we ought simply to sign on the dotted line and have no more to say about it. I do not think that that is the view of the


House as a whole. Both parties realise the great advantages and the dangers and are in favour of very careful consideration, both of how it would affect us and how it would affect, above all, the Commonwealth countries and also our partners in the European Free Trade Association, before embarking upon a formal negotiation.

Oral Answers to Questions — TRIBUNALS (POWERS AND FUNCTIONS)

Miss Bacon: asked the Prime Minister if he will set up a new committee of inquiry into the powers and functions of tribunals.

The Prime Minister: I do not think there is any need for a further inquiry so soon after the very full inquiry carried out by the Franks Committee.

Miss Bacon: Is the Prime Minister aware that in a recent case which I brought to the notice of the House a constituent of mine was acquitted at Leeds Quarter Sessions, by the unanimous verdict of the jury, of falsely obtaining unemployment benefit, but that a year later the tribunal set up under the Ministry of Pensions and National Insurance said that he must repay the money, and according to the Parliamentary Secretary to the Ministry of Pensions and National Insurance the tribunal judged that the man's good faith had not been established? In those circumstances, is it not time that we knew just where we stand with regard to the relationship between courts of law and tribunals?

The Prime Minister: There are two points on that. I understand the hon. Lady's anxiety. As I understand it, this matter is now the subject of appeal to the National Insurance Commissioner who is the final adjudicating authority. The matter is, therefore, not finally settled. I also understand that the question which he has to decide is whether somebody who obtained unemployment benefit while in fact working should pay back National Insurance money which he ought not to have had, and this is not the same question as to whether he obtained it by fraud.

Mr. G. Brown: Will the Prime Minister, if he can find the time, look into this case himself? Here was a man who went before the courts. He was acquit-

ted by a unanimous decision of the jury, and on the face of it the tribunal seems to have set itself up to decide the same question in a wholly contrary manner. It looks to me very worrying. Will he have a look at it before he pronounces judgment?

The Prime Minister: Yes, Sir. I have not only read the debate, but I have looked at the papers. There are two quite separate questions. There is the question of whether a man obtains money by fraud, and the quite separate question of whether a man who obtains money, not by fraud, should pay it back if it is shown that he should not have had it. That is the question which is now subject to appeal by the tribunal. Only when that appeal is settled ought I or the Minister to take cognisance of it.

Mr. W. Yates: Will my right hon. Friend accept that on this question, and other questions like it, people are getting worried by the intervention of the Executive in the function of the judiciary and, in particular, the dual rôle of the Lord Chancellor in another place?

The Prime Minister: Yes, Sir. But, of course, under the existing machinery—until we set up the Franks Committee and got the tribunals—this matter would have come before the Executive system which had been going on for many years. Our object in setting up the whole Franks system was to make some corrective over the powers of the bureaucracy and that, I think, it is effectively doing.

Miss Bacon: Does the Prime Minister realise that in coming to its decision, the tribunal did not say that the man had got the money accidentally, but that his good faith had not been established? Surely, if anybody walks out of court a free man, he has a right to feel that his good faith has been established.

The Prime Minister: I should think it wiser to let us have the result of the tribunal before we decide what, if anything, should be done about it.

Oral Answers to Questions — SOUTH KOREA (FAR EAST FLEET)

Mr. G. Brown: asked the Prime Minister whether he was consulted before it was decided that the visit of the task force of the Far East Fleet to South


Korea should be cancelled; and what were the reasons for the cancellation.

The Prime Minister: The Government decided that, following the coup d'état, the constitutional position in Korea was somewhat too obscure for a visit to be desirable at that moment. They so advised the Commander in Chief who gave orders for the visit to be cancelled.

Mr. Brown: Is the Prime Minister aware that I am sorry he did not say that he had been consulted, because I had hoped to have this opportunity of congratulating him? In view, however, of the difference between the decision here and that taken only a few days before in Angola, would it not be a very good thing if the Prime Minister were to involve himself in these questions and get some consistency in the Government's actions?

The Prime Minister: Their action is perfectly consistent. I have answered the case which the right hon. Gentleman has brought to me and I think that the action taken was correct.

Sir A. V. Harvey: Will my right hon. Friend bear in mind that the visit of the British frigate to Angola satisfied many hundred British residents who were very glad to see the White Ensign there?

The Prime Minister: Yes, Sir. That is another very good reason.

Oral Answers to Questions — HOLY LOCH (SECURITY ARRANGEMENTS)

Mr. G. Brown: asked the Prime Minister whether, in view of the recent disorders at Holy Loch where demonstrators tried to board the submarine depot ship "Proteus", he will review the security arrangements as set out in the agreement which he made with the President of the United States of America, bearing in mind a possible change in location of the depot ship.

The Prime Minister: The security arrangements are adequate to safeguard the operational use of the Holy Loch anchorage, and they are kept under review. As regards location the Holy Loch provides the most suitable anchorage for the ship and its submarines in the United Kingdom and, as I have said, its operational use is not affected by these demonstrations.

Mr. Brown: On the first part of his Answer, how can the Prime Minister say that in view of the fact that the crew was absolutely anchored on the boat—[Interruption.]—that is the right phrase—and any services required by the boat could not get to them? Is the right hon. Gentleman aware that the situation earned for us the maximum bad Press in America, and that a round-by-round commentary on the fight went to Russia? Whatever the merits or demerits of having "Proteus" here, does the Prime Minister not think that the Government have a duty to protect these ships and their personnel a great deal better than they have done in this case?

The Prime Minister: There are, of course, different views about this matter—I recognise that—but I think that it is best just to let these things work themselves out. I do not think that there will be any permanent trouble and I was glad to see that the American Navy are perfectly satisfied with the situation.

Sir J. Duncan: May I ask my right hon. Friend, as a fellow Scot, whether he realises that the local people are perfectly happy with "Proteus" if they could keep away the "beatnik" Englishmen?

The Prime Minister: There are sometimes Welshmen, too.

Mr. Emrys Hughes: Is the Prime Minister aware that events have proved that the Scottish T.U.C., which speaks unanimously for Scottish trade unionism on this matter—[HON. MEMBERS: "Nonsense."]—has been proved right in its protest against this vessel being brought there? Is he aware also that, as was shown by Prime Minister Nehru in India, a nation can fight for its independence by non-violent methods as successfully as by methods of violence?

The Prime Minister: That, of course, is a tenable proposition, that one can support one's country by non-violent methods. Fortunately, it is one which many Members of this House have not found it their duty to practise either in the First or in the Second World War.

Mr. Brown: May I press the Prime Minister again on the last part of my Question? Is he aware that there are many people who think that the ultimate


reason for placing this thing in the Holy Loch was the argument that the crew's families had to be near an area of considerable urban development? [Interruption.] Would it not be a good thing if the Government and the American Government looked again at the possibility of locating this depot ship somewhere up the West Coast of Scotland, possibly in Loch Ewe, where the same natural conditions apply? [Interruption]

The Prime Minister: All the matters were carefully looked at from both the technical, anchorage, Air Force communications and, of course, the social viewpoints and we came to this decision after very careful consideration with our American allies. [Interruption.]

Mr. Speaker: Order. I request hon. Members to keep a reasonable degree of silence.

BUSINESS OF THE HOUSE

Mr. G. Brown: May I ask the Leader of the House whether he will state the business of the House for next week?

The Secretary of State for the Home Department (Mr. R. A. Butler): Yes, Sir. The business for next week will be as follows:
MONDAY, 5TH JUNE, and TUESDAY, 6TH JUNE—Report and Third Reading of the Licensing Bill.
WEDNESDAY, 7TH JUNE, and THURSDAY, 8TH JUNE—We shall make further progress in Committee on the Finance Bill.
FRIDAY, 9TH JUNE—Consideration of Private Members' Bills.
MONDAY, 12TH JUNE—The proposed business will be Supply [16th Allotted Day]: Committee.
Debate on Agriculture in England and Wales.
Consideration of the Motion relating to the Fertilisers (United Kingdom) Scheme, 1961.

Mr. Brown: Concerning the business announced for Monday and Tuesday, which we on this side, unlike the Government, have treated all the way through as a House of Commons matter not subject to the Whips, is the Leader

of the House aware that about 160 Amendments have been put down, half of which at least appear to be Government Amendments? Does he consider that he is realistic in hoping that the House will get through this business in two days?

Mr. Butler: Yes, Sir, I think so. One of the main Amendments is followed by a great number of consequential Amendments relating to a request made in Committee for a new form of confirmation order for licensing. That in itself is not so much controversial as technical and intricate. It will not necessarily be difficult to get through the main issues to be discussed by the House in the time.
We want to treat the Bill in the same spirit as that to which the right hon. Gentleman referred. Let us try and make the best possible progress.

Mr. Rankin: From time to time, when dealing with business on Thursdays, the Home Secretary has promised us a debate on shipbuilding. Does he not realise that last Monday's proceedings made such a debate urgent, and that if he does not proceed to fulfil his promise about debating the future of shipbuilding we may well be looking back on its past?

Mr. Butler: I cannot make a further statement on that today.

Mr. P. Williams: Will my right hon. Friend nevertheless tell the House whether it is not now possible to drop the North Atlantic Shipping Bill and in place of it to give a day for a general debate on shipping and shipbuilding, which is incomparably more important?

Mr. Butler: No, Sir. The Government intend to proceed with and carry through that Bill.

Mr. G. Thomas: In view of the highly controversial nature of the Licensing Bill in Wales, and bearing in mind the well-known concern of the Leader of the House for people who are left out in the cold, does the right hon. Gentleman not think it a shame, to use his own language, that the Welsh people have been left without protection against the ground landlords for so long? Will he now give us an opportunity for a debate on the leasehold system?

Mr. Butler: I congratulate the hon. Member on bringing so many points into his question, but I cannot offer him a day at the moment.

Mr. W. Yates: May I ask the Leader of the House whether he has noticed a Motion on the Order Paper standing in my name, concerning the visit of President Kennedy to Europe? In view of the State visit which President Kennedy is making to France, and his visit to Vienna, will there be any opportunity for Members of both Houses to hear what the President has to say about his meeting with Mr. Khrushchev? Has my right hon. Friend given the matter any consideration?
[That this House, in view of the fact that the President of the United States of America has accepted an invitation to make a semi-State visit to the Republic of France in May, calls upon Her Majesty's Government to invite President Kennedy to visit Great Britain and to address Members of the House of Commons and Lords at Westminster, before returning to Washington, concerning the state of the alliance between Great Britain and the United States of America and the plans of the free world to conquer outer space.]

Mr. Butler: I do not think that that is a suitable question to deal with at business time, and I cannot give any answer to it at the moment.

Mr. Glenvil Hall: Reverting to the question asked by my right hon. Friend the Member for Belper (Mr. G. Brown), may I ask the right hon. Gentleman whether, on reflection, he does not agree that two days for the Report and Third Reading stages is far too short for a Bill of the calibre of the Licensing Bill? Many of the Amendments, a number of which he has tabled, are of a very complicated nature. In view of that, surely the right hon. Gentleman would wish the House to debate the Bill properly and at length.

Mr. Butler: I certainly accept what the right hon. Gentleman says about debating the matter properly. However, the answer which I gave to the right hon. Member for Belper (Mr. G. Brown) holds good, namely, that we should make the best progress possible. I think that it will be seen that the issue is properly debated.

Mr. W. Yates: On a point of order. In view of the reply just given by the Leader of the House, is it not possible for my right hon. Friend to consult through the usual channels and to arrange for a better reply to be given to an hon. Member to a question like that?

Mr. Speaker: It may or it may not be, but it cannot be a point of order.

Mr. Biggs-Davison: Has my right hon. Friend studied the Motion on the Order Paper, signed by nearly 100 hon. Members, including one member of the Liberal Party, calling for the release and repatriation of President Tshombe, of Katanga? If he cannot arrange an early debate, will he take advantage of Mr. Hammarskjöld's presence in England to hand him a copy of the Motion?
[That this House urges Her Majesty's Government, in view of the increasing threat to law and order in the Congo and especially in Katanga, and the consequent threat to neighbouring British territories, arising from the arrest of President Tshombe in violation of the safe-conduct he was guaranteed by the Congo Government, to take immediate steps to press Mr. Hammarskjöld personally to intervene to secure President Tshombe's release, in accordance with the original United Nations Congo resolution.]

Mr. Butler: I notice that my hon. Friend does not press the question of time. I will certainly discuss the issue with my right hon. Friend principally concerned.

Mr. Strauss: Can the right hon. Gentleman tell us his proposals concerning the Road Traffic Bill, since it has not yet emerged from the House of Lords? The last time a similar Bill came before the House of Commons, in 1956, it was more than six months in Committee.

Mr. Butler: It is precisely because it has not yet emerged from the Upper House that I cannot make any statement as to its future.

Mr. Darling: Could the right hon. Gentleman give us some information about the position of the Weights and Measures Bill, which has emerged from the other place? Could he say what the prospects are of getting it through this Session?

Mr. Butler: I have no statement to make on that subject at present.

Mr. Grimond: In view of the intolerable business muddle in which the Government now find themselves, will the right hon. Gentleman tell us soon which Bills will be abandoned? While he is considering this, will he give high priority to the possibility of abandoning the North Atlantic Shipping Bill and the Crofters Bill, which has met with unanimous dislike from hon. Members on both sides after eighteen sittings of the Scottish Standing Committee?

Mr. Butler: We intend to proceed in particular with the two Bills to which the hon. Gentleman has referred.

Mr. S. Silverman: May I once again draw the right hon. Gentleman's attention to the Motion in his own name about House of Lords reform? Can he tell us when it is likely to be moved? If his difficulty arises out of anticipation of controversy, might not that be cleared up if he accepted the Amendment to the Motion on the Order Paper in the name of my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes)?

[That it is expedient that a Joint Committee of both Houses of Parliament be appointed to consider, having regard among other things to the need to maintain an efficient Second Chamber.

(a) the composition of the House of Lords,
(b) whether any, and if so what, changes should be made in the rights of Peers and Peeresses in their own right in regard to eligibility to sit in either House of Parliament and to vote at Parliamentary elections; and whether any, and if so what, changes should be made in the law relating to the surrender of peerages, and
(c) whether it would be desirable to introduce the principle of remuneration for Members of the House of Lords, and if so subject to what conditions,

and to make recommendations.]

Mr. Butler: I cannot undertake to accept any Amendment, but I shall be announcing in due course when we propose to make progress with that particular matter.

Mr. Jay: Could not the right hon. Gentleman have occupied his Whitsun

Recess more profitably in overcoming the muddle of the Government's legislative programme rather than by flying to Madrid and back?

Mr. Butler: My time was profitably spent. Anyway, it was very enjoyable. As far as I can see, Government business is running quite up to date, and we propose to make further progress with it during the agreeable months which lie ahead.

Mr. Stonehouse: Is the Leader of the House yet able to say when he can arrange time for a debate on the Morse Report on the High Commission Territories in view of the important position now of the Protectorates?

Mr. Butler: I realise the importance of the subject. I will take note of what he has said.

Mr. Ross: Does the right hon. Gentleman recollect that he rejected a suggestion of mine about the promotion of certain Scottish business last week? Now that we have not got anywhere near it, will he tell us what he intends to do about the Lords Amendments to the Flood Prevention (Scotland) Bill?

Mr. Butler: We shall take them in due course.

Mr. Gordon Walker: If the Government's business is going so well, can the right hon. Gentleman give us an assurance that he will proceed with the Road Traffic Bill?

Mr. Butler: No, Sir. I cannot make a statement until it emerges from another place.

Mr. Donnelly: Can the Leader of the House give us an assurance that the debate on agriculture will be drawn in such terms that it will be in order to discuss the implications to agriculture of our entry into the Common Market?

Mr. Butler: Being a Supply Day, this is Opposition business. Therefore, perhaps the hon. Gentleman will consult the Opposition Front Bench to ensure that the debate is according to what he desires.

Mr. Emrys Hughes: Is the right hon. Gentleman aware that there are many precedents for distinguished foreign statesmen addressing Members of both Houses of Parliament when they visit


this country? Could not he use his influence with the Prime Minister, if he has any, to persuade President Kennedy to address a meeting of both Houses, because some of us would like to put some questions to him, especially one asking when he proposes to take the Polaris base home to America?

Mr. Butler: It would be tempting for me to use business time to make a great many pronouncements, some of which would be agreeable to some people and some to others. But I must stick to answering business questions, and I do not think that this is a suitable question to raise at business time.

Mr. Thorpe: Arising out of the question of the hon. Member for Pembroke (Mr. Donnelly), could the Leader of the House give us an assurance that the Minister officially responsible for making pronouncements on the Common Market will be on the Government Front Bench to reply to the debate on agriculture?

Mr. Butler: The hon. Member will find that the Government Front Bench is usually excellently manned.

Orders of the Day — FINANCE BILL

Considered in Committee [Progress, 16th May].

[Sir GORDON TOUCHE in the Chair]

Clause 5.—(INCREASE OF RATES OF VEHICLES EXCISE DUTY.)

Motion made, and Question proposed, That the Clause stand part of the Bill.

3.43 p.m.

Mr. G. R. Mitchison: This Clause increases the Excise duty on vehicles in respect not only of the ordinary motor car, but a whole group of commercial vehicles and vehicles owned by local authorities and other people who have to carry out public duties of various kinds. In his Budget statement, the Chancellor of the Exchequer estimated that there would be a yield of about £25 million in the current year from this increase. The question which we wish to raise today is whether it is worth it, particularly in the light of the Bill and the Budget statement which preceded it.
This is a Bill which, taken as a whole, makes some notable concessions in direct taxation. I shall not go into them now in detail, but we are all aware of the concessions which are being made to Surtax payers, to take one obvious instance. We are also aware that there are other proposals, which we debated quite recently, concerning the duty on heavy oils which will bear, to some extent at any rate, on those who are using vehicles whose rate of duty falls to be determined today.
It is obvious that the Excise duty on vehicles presents a temptation to any Chancellor of the Exchequer. The fact is, however, that so far as they are intended to meet expenditure on the roads, such expenditure has still not risen to an inordinate extent for a civilised country. More expenditure is needed. The question, broadly, which arises on this Clause is: ought the users of the roads, both by car and by commercial vehicle, to bear this increase at the moment, an increase by way of indirect taxation, when considerable direct taxation concessions are being made and when there is in the Bill at least one other Clause which will hit them directly?
The present duty on the ordinary motor car is £12 10s. It will in future be raised to £15. This is a substantial increase. It is an increase in the nature of a payroll tax on motor cars. It may not make much difference to comparatively wealthy people who own large cars, but it will make a considerable difference to the large and increasing number of people who have small cars and who take the family to the country at week ends, and so on. Hon. Members and I know from experience in our own constituencies how numerous is the number of people in this class. We are not at the moment concerned with matters of road safety, with the safety of the car, or anything of that sort. We are solely concerned with whether these people should be called upon to pay an increase of one-fifth on the present duty.
I now turn to the other classes who are affected by the proposed increase. I take, first, the farmer. It always seems to me that indirect taxes on farmers should be considered closely, for this reason. Often they result in an increase in the farmer's expenditure one way or another and the necessity of the recovery, or partial recovery, of the increase under the Price Review. In this case, one asks whether it is worth increasing the duty and what other effect it is likely to have. I suppose that the effect will be to increase the inevitable expenditure on a modern farm of any size and to increase it under the heading of expenditure on tractors or other motor vehicles of one kind or another. An increase of that kind will, in the long run, come back to the ordinary consumer.
I turn from the farmer to the vehicles of local authorities. They are specially rated under the Vehicles (Excise) Act, 1949, the amendments to which are introduced by this Clause and the details of which we will consider when we come to the appropriate Schedule. These vehicles are used for public purposes and for carrying out the necessary duties of local authorities. By putting an additional tax on them, the right hon. and learned Gentleman is transferring from the tax account, if I may so put it, to the rate account a certain amount of necessary expenditure. A step in that direction is almost always wrong. We take objection to rates—we always have taken objection to them—on the ground

that they come down more heavily on the small man, the small householder in particular, than on the better-off person. Broadly speaking, we regard it as better to meet expenditure of this kind out of taxation rather than out of rates.
What is happening is that the tax is to be increased and that the local authorities will have to pay more in respect of the vehicles that they require for their necessary work. As a result, there will be a burden on the rates transferred from the ratepayer to the taxpayer. We suggest that in this case, at any rate, that is rather doubtful wisdom. Local authorities nowadays are finding it extremely difficult to do the work which they are required to do and an additional burden of this kind is no particular help to them. I suggest that the £25 million here sought by the Chancellor might much more appropriately have been found by some reduction of the concessions which have been made in direct taxation. This is a piece of indirect taxation which will have a bad effect on the public generally.
There are one or two other aspects of this matter with which I should like to deal. Many of us are interested in the difficulties and problems of transport in country districts. Nowadays the closing of branch railway lines and the difficulties consequent on that are telling very hard on the rather remote communities where people find it difficult to keep in touch with the outside world and to get to and from their places of work and their shoping centres. Additions of this kind to a tax on vehicles tell on rural transport. They tell on the transport of individuals and equally on the transport of goods. There are many remote areas, for instance, in Scotland, where the cost of transport of goods bulks largely in the final price to the consumer. The addition of a tax of this kind is bound to have a heightening effect on prices in the remote areas.
Looking at this as a piece of indirect taxation, surely it can be said that a tax on road transport, telling on both passenger and goods transport, is bad in principle and is likely to have a bad effect out of proportion to the revenue-raising factor in it, which we would all agree the Chancellor has to consider. But if the right hon. and learned Gentleman has to consider it, is not a tax on transport of this kind in relation to rural areas, to the


functions of local authorities, and to the growing need in the community to get about from place to place, a very doubtful piece of wisdom at the moment? It is unlikely to have a deterrent effect. It will simply impose additional charges on those who use transport and who need the goods which are brought to them by road transport.
I appeal to hon. Members opposite, many of whom are much concerned with farming problems and the difficulties of rural areas and remote communities, to consider whether they are justified in voting for a Clause which will take £25 million out of the pockets of just the people who are concerned and raise it by indirect revenue when it could more properly be raised by limiting the concessions made on direct revenue in the Bill. We on this side of the Committee object to the Clause and we shall show our objection when the time comes.

Mr. Denys Bullard: The hon. and learned Member for Kettering (Mr. Mitchison) has dealt with the effect of the tax on transport in the rural areas. I should like to say something on that aspect of the Clause and to protest against what I think will be an increase in the costs of industry and agriculture. In particular, I should like to deal with the effect which the tax will have on the increasing number of farm-workers and other people in similar circumstances who are just coming to the point of owning motor cars and to whom the tax will be a considerable deterrent at a time when rural transport problems are very much in our minds.
I can well understand the Chancellor's wish to incorporate in the Budget and in the Finance Bill some measures which will tend to slow down internal demand and which will add to his very desirable surplus. I know that any such measures are liable to meet objections and I am cognizant of the general purpose of the Budget which I think is good. But, at the same time, I think that it would be wrong if, from the rural point of view, I lid not make a few points about this increased tax.
There is a disposition to regard the motor car as something of a luxury, whereas to many who live in rural areas it is very much of a necessity. It is becoming more and more a necessity

these days, with the increasing mechanisation of farming. The Chancellor has made an extremely valuable concession to the horticultural industry in relation to expenditure on glasshouses. The horticultural industry is a great user of vehicles in the transport to market of small quantities of produce. The increased tax will be an added burden to that industry and I am anxious that its burdens should not be increased at present.
The hon. and learned Member for Kettering mentioned the recovery of these costs by agriculture in the Price Review. There is a limit to what can be done in that direction. We know that there is not a complete recovery of increased costs in the Price Review. I do not think that it is a desirable process to add to costs and then add money, by increased grants and guaranteed payments to agriculture, to compensate for the increased costs which the Government themselves have imposed. If the Government are prepared to make that recompense, the community might not be so prepared. There is great danger in saying that in the case of agriculture increased taxation can be put right in the Price Review.
My final and main point is the effect of the tax on farmworkers and on people of similar incomes who must live in the country and who frequently need a car to get to their places of work. The £2 10s. increase in the duty will be a considerable sum to them. We are constantly investigating the whole problem of rural transport. We have had the Jacks Report on Rural Bus Services, but I maintain strongly that the real answer to this problem for most country-dwellers nowadays is a motor car or a motor-cycle. It is difficult to provide a bus service comprehensive enough to cover all rural needs.
I greatly welcome the increase in the number of motor cars run by farm-workers. It is not at all an uncommon sight to see in a field or a farmyard a considerable number of small cars, some of them not very modern, which are used to take workers to and from their places of work. This is very desirable. But I have been forcibly struck by the enormous difference between the use of a car by the farm-worker and its use by his employer, and I speak as an employer.
The employer has many means of recovering increased costs in whole or in part. There is the depreciation allowance, and he can claim the cost against tax. The farmworker, as far as I know, cannot claim anything for the use of his car in going to and from work. This considerable difference in treatment is unjust, and this increase in tax will tend to add to that injustice.
I have great doubt whether the Chancellor will be able to do anything about these two aspects of the matter at this stage, but I want to register a protest at what I consider to be an undesirable increase in motor taxation, particularly from the rural point of view.

4.0 p.m.

Mr. E. G. Willis: The hon. Member for King's Lynn (Mr. Bullard) has expressed anxiety for those people living in the rural districts of Norfolk. I happen to know Norfolk quite well, but I also know Scotland quite well, where the transport difficulties are infinitely worse. I am attracted by the arguments that he advanced about the necessity for cars and vehicles in those areas, and they are particularly true of the Highlands. The interesting thing is that, unfortunately, in the Highlands and great parts of Scotland, we do not seem to be getting very much out of all this road taxation.
When we come to examine what we in Scotland, for instance, are getting from the Exchequer for roads, we find that Scotland gets about one-eighth or one-tenth of the amount being spent on roads in the United Kingdom, and the Highland areas, where roads are very necessary indeed, are getting about one-fortieth of the amount being spent by the Exchequer on roads in the United Kingdom. Furthermore, the roads that are being made are single-track.
It is a bit of an imposition on the part of the Government to say at this time that people who live in these areas have now to pay not £12 10s., but over £15 for a single track road, which, in many cases, they have not yet got, in an area of the country which is receiving for over one-sixth or one-fifth of the land area of this country, one-fortieth of the amount being spent on roads. This tax, when we look at it from the point of

the people who live in those areas, is an imposition.
It is a much greater imposition when we come to consider the fact that it is helping to relieve the tax difficulties of the £5,000 a year people for whom the Chancellor expressed great concern. He was very emphatic and repeated his "great concern" to bring home the difficulties which these people were finding in educating their children. The people for whom I am speaking have not the amount of money coming in which the Surtax payers are finding it so exceedingly difficult to live on.
The people in these areas are finding it even more difficult. Yet to those who, in many cases, are living on well under £1,000 a year, we are saying, "We shall make it much more difficult for you to travel about. We shall not make it easier for you to have a car to get to the nearest village or to a town"—which is sometimes 150 miles away. "We shall make it more difficult by putting on this extra £2 10s." There is no rhyme or reason in the type of argument which the Chancellor advances to the Committee on behalf of his Budget and of this tax.
There might have been a case for increasing the tax on some of the very large cars that seem to take up acres of road space; but to increase the tax for a Mini-Minor by £2 10s. is too much. It is certainly asking too much of those of us who represent and speak on behalf of districts where the use of cars is very necessary. I should have thought that the Chancellor would have had second thoughts about this. If he wants more money for this purpose, let him put a higher tax on the huge cars, which take up about four times the road space of the sort of car which is used by working-class people, and not increase the tax by a flat rate.
That is all that I have to say on this subject, and I was prompted to do so by the expression of opinion of the hon. Member. I could say a great deal more, because one of the problems arising in the remoter areas of Scotland is the increased cost of living resulting from transport charges. We have spent about fourteen mornings in the Scottish Grand Committee during the past two or three weeks discussing precisely these problems.


There is a vast area suffering depopulation. The population is declining by 1,000 a year.

The Chairman: The hon. Gentleman is getting rather far from the Clause.

Mr. Willis: I bow to your Ruling, Sir Gordon. I am only trying to relate this tax to the fact that it may add to that depopulation. That, to me, seems to be a very legitimate argument.
The tax will result in increasing the transport charges in those areas. People who carry goods in lorries and vans for the tail-end of the journey will add on the extra cost, and, knowing what some people are like, they will probably add on a bit more. Therefore, the cost of living will go up even further and it will become increasingly difficult to maintain the population in those areas.
The Financial Secretary smiles, but it is not a smiling matter; it is a very serious matter. I can see nothing humorous about it as a Highlander, not even as a Scotsman, and as one who lives in the Highlands. I see nothing humorous about the fact that the population is declining by one-sixth every year. To me, it is a tragedy. Anything that adds to that tragedy will certainly be opposed by me. This proposal seems to increase the difficulties of people who are likely to remain in those areas.
The tax, as framed, is a bad one. Had the Chancellor wanted more money, he could have thought of a better way of getting it. If he held up the tax for a year to see what would be spent on the roads, there might be a better case for it. As the financial provisions of the Budget stand at present, it is a bad Clause, and I am glad that my right hon. and hon. Friends will oppose it.

Mrs. Harriet Slater: I wish to reinforce the two points made by my hon. Friend the Member for Edinburgh, East (Mr. Willis). The first is that the cost of this increased tax will be passed on. The hon. Member for King's Lynn (Mr. Bullard) said that it might be given back to farmers in the Price Review. But it might not, because, as he said, there is a limit to how much the public will stand in the way of taxation along these lines. We all know, particularly housewives, that a tax of this kind is never

imposed unless it can be passed on somewhere, and usually it is collected from the housewives in the form of increases in the price of commodities. No one need deny that, because we all know that it happens.
This could prove a very serious tax not just for those people who own cars or have to use vehicles, but for ordinary persons, and particularly the poorer sections of the community and the old-age pensioners. We shall be told that we cannot help them. They are not getting any help from this Budget in any case, but they will feel the effects of the increase in the cost of commodities. The price of horticultural produce will be affected, and already purchasers have to pay enough for that, especially at weekends and holiday time.
Many people in the rural areas will be affected not because there are no buses available, but because railways are being closed in such areas and people living there can get from place to place only by means of motor cars which they or their friends may own. Not only rural workers will be affected. The ordinary working man who is trying to meet the cost of owning a car will be affected. It is not easy for a working man to decide whether he can afford to continue to run a car when the price of first one thing and then another is increased. For such people and their families it is often the case that the possession of a car is the only way in which they can all enjoy a holiday together, or enjoy some pleasure at the week-end.
This is a tax on the ordinary working people. As has been said, there are many other and more adequate means of raising the money which will be collected by means of this tax. The tax is thoroughly bad and unjust from the point of view of the majority of the people. Its imposition is, of course, in keeping with the attitude of mind which has dictated the whole of the provisions in this Bill.

The Financial Secretary to the Treasury (Sir Edward Boyle): First, I should like to say that I meant no discourtesy to the hon. Member for Edinburgh, East (Mr. Willis) because I smiled while he was speaking. I was reflecting on the last meeting of the Scottish Grand Committee which I attended when the hon. Gentleman was addressing the Committee with great eloquence. The then hon.


Member for Aberdeenshire, East, the present Lord Boothby, rose to a point of order because he said that so much noise was being made that he could not get on with his correspondence.
The first thing I wish to tell the Committee is that the proposal in Clause 5 to raise £25 million by increasing the motor duty is fundamental to the Budget proposals of my right hon. and learned Friend. This amount of £25 million is essential if my right hon. and learned Friend is to achieve his twin objectives of securing a surplus above the line, a revenue surplus, of over £500 million, and reducing his overall borrowing requirements to well below £100 million.
I must tell the hon. and learned Member for Kettering (Mr. Mitchison) that he overlooked the important point that my right hon. and learned Friend's Surtax concessions do not apply to the current financial year. They affect only the forthcoming financial year and, therefore, they have nothing to do with the surplus at which my right hon. and learned Friend is seeking to aim this year. As a matter of fact, there are only two Clauses in the Finance Bill—perhaps it would not be out of order for me to refer to this, in view of what was said about this Clause—which make any sizeable concessions at all for the current financial year.
One is Clause 13, referring to Income Tax relief for National Insurance Contributions, which will cost about £12 million this year, and the other is Clause 29, affecting Stamp Duty on bills of exchange. The total concessions made in these two Clauses amount to about half the revenue that my right hon. and learned Friend is seeking to raise by this Clause.

4.15 p.m.

Mr. Harold Wilson: By the argument about this year and next year, does the hon. Gentleman mean that his right hon. and learned Friend would be prepared to accept a manuscript Amendment—if you, Sir Gordon, were disposed to accept it—to limit the effect of this Clause to one year on the argument which he has used, and that next year the increase in tax could be dropped altogether and the money recovered by less grandiose reliefs on Surtax? On this argument, is not the hon. Gentleman

saying that since the tax does not affect this year and the Surtax applies next year it would be perfectly fair to alter the redistribution of Surtax and the motor vehicle tax?

Sir E. Boyle: No. My right hon. and learned Friend is not able to anticipate his next year's Budget statement to that extent. If, next year, the right hon. Gentleman chooses to put down a new Clause to that effect, it appears to me that he would have a perfectly arguable point upon which the Committee could take a decision. But what has been said by the right hon. Member for Huyton (Mr. H. Wilson) does not in any way invalidate my argument that for this year my right hon. and learned Friend has decided that he must budget for a surplus of a certain figure and that, therefore, this amount of £25 million is essential if he is to achieve that figure.
A number of hon. Members have properly referred to the social effects of the increase in motoring during these last years, and I agree with what was said by my hon. Friend the Member for King's Lynn (Mr. Bullard) by the hon. and learned Member for Kettering and by the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater). I do not think that there is any doubt that the increase in motoring in this country in recent years has made a great difference to the freedom which people enjoy, especially those in country districts.
I have referred earlier this Session to the hon. Member for Grimsby (Mr. Crosland) without giving him notice, but I do not think that he will object if I refer to him again now, because I intend to do so in complimentary terms. He once wrote, rightly, that the same car which took people to the seaside could also take them to the historic houses. That is a fair point to make. There is no doubt that the increase in private motoring over the last ten years has had a considerable effect upon the ability of people to enjoy experiences of all kinds, many of them very worth while. At the same time. I do not believe that, after a decade in which the standard of living of the ordinary wage earning families has risen by as much as 10 per cent. the extra amount of £2 10s. on the Road Fund licence will cause large numbers of private motorists to give up motoring.
I think it worth remembering that the average family motorist has for more than seven years, ever since 1953, paid less duty than he or his predecessor with a car of say, 12 h.p. paid twenty years ago; and very little more than he paid as long ago as 1921. The present increase in motor duty does no more than go a little way to re-establishing the earlier rates of duty in real terms. Considering the whole structure of taxation in this country, I do not think that the present rates of motor duty are so high that the increase proposed in this Clause is unjust.

Mr. Douglas Jay: Does the Financial Secretary mean that the Government intend to step up all taxation on that basis?

Sir E. Boyle: All increases in taxation of this kind are disagreeable, and whatever type of taxation a Government may choose to increase they must meet one kind of accusation or another.
If we frequently increase a particular indirect tax, like the Tobacco Duty, we are told that we are making one part of the tax structure bear a disproportionate share of the burden. On the other hand, if we say that the motor taxation has not been increased for a number of years, and we feel that this part of the system should bear an increase, we are blamed by hon. Members opposite who ask whether we propose to make increases on this basis right across the field of taxation. Obviously, the Government have to draw a balance. I do not believe that this increase in itself is unreasonable, or that it will discourage a very large number of private motorists.
The hon. Member for Edinburgh, East and the hon. and learned Member for Kettering raised the question of whether we should continue with a flat-rate tax. I think that the hon. and learned Gentleman said that we now had a sort of payroll tax on cars. In the speeches which have been made this afternoon, and also from what was said by the right hon. Member for Huyton during the second Reading debate, I detected a suggestion that we should consider whether we ought not now to return to a graduated tax—

Mr. Mitchison: I did not say that, nor did I intend to. All I said was that this operated as a payroll tax more

hardly on the small car owner than on the owner of a large car.

Sir E. Boyle: That might be true in the case of any variation in the duty. But since the hon. and learned Gentleman and the right hon. Member for Huyton raised the point, a flat-rate tax was originally introduced—

Mr. H. Wilson: Do not let us waste time by going over that again. We discussed it during the Second Reading of the Bill. My view was that this had nothing to do with horsepower. I said that the horsepower tax led to distortion of engine design and that I did not want to go back to it. Here, I was referring to space—and there is some connection between the space occupied on the Queen's highway and the ability to pay. Will the hon. Gentleman address himself to that point and not to something which we have not suggested?

Sir E. Boyle: I take note of what the right hon. Gentleman says. I was coming to that specific point in a moment. I do not want to make too much of this, but I was simply saying that it is true that the old tax was dropped in order to divorce engine design from taxation and to ease the export problem of the manufacturers. Lord Dalton said of the change in 1947:
…the purpose is to divorce design from taxation and thereby help the industry towards standardisation of models, and to help it to make its contribution to our exports."—[OFFICIAL REPORT, 9th July, 1947; Vol. 439, c. 2276.] I was going to say that we took due note of the point made by the right hon. Member for Huyton in the Budget debate. Anybody who, at any time, has enjoyed reading through that remarkable work of Professor Pigou's, "The Economics of Welfare", will recognise the rather Pigovian nature of the point made by the right hon. Gentleman, which was a fair point to make. But the same argument which led Lord Dalton to abandon the old horsepower tax would also apply very considerably to a graduated tax based on length.
Such a tax would be difficult and costly to administer, compared with a flat-rate tax. Furthermore, this scale would have to be a gradual one if we were to avoid the worst design difficulties. Also, to introduce even one additional check on each of 6 million


cars would take time and cost a good deal of money. Some sort of check procedure would have to be instituted, very much on the same lines as the check weighing of goods vehicles, introduced to protect the revenue following criticism from the Public Accounts Committee.

Sir Douglas Glover: Would not my hon. Friend agree that, whereas the horsepower tax completely distorted the engine design of British cars and resulted in a great decrease in our exports, if the Chancellor brought in a tax on length or size, it would distort body design, with equally disastrous effects?

Sir E. Boyle: I am obliged to my hon. Friend.
The right hon. Member for Huyton, and some others, have made a point which is worth considering. We do not say that the present structure of motor taxation is right for all time, but one has to consider the effects of the right hon. Member's proposal on design, and also the administrative difficulties that would result. At the moment, having given full consideration to this matter, my right hon. and learned Friend does not think that this is the right time to make the change proposed by the right hon. Gentleman.
The House has always opposed in principle, as being contrary to tradition, the idea of what is often called hypothecated taxation—trying to make a precise comparison between the amount now being gained in motor taxes and taxation on the motorist generally, and what is spent on the roads. On the other hand, it is worth remembering, in the context of this debate, that, as my right hon. and learned Friend said in his Budget statement, Exchequer expenditure on the road programme for Great Britain is at the highest level ever known. Less than ten years ago it was £3½ million; this year it is £88 million, and next year it will be about £100 million. My right hon. and learned Friend said in his Budget statement:
I add by way of postscript that these increases will enable me to face with greater equanimity the steadily increasing burden of expenditure upon the roads."—[OFFICIAL REPORT, 17th April, 1961; Vol. 638, c. 818.]
My right hon. and learned Friend fully realises, as we all do on this side of

the Committee, just what the increase in private motoring has meant in social terms in the last ten years. On the other hand, he thinks that the motor taxation can bear this increase and he must invite the Committee to pass this Clause, because the extra £25 million involved is fundamental to his Budget this year.

Mr. H. Wilson: The Committee has to decide what attitude it is to take on the question of whether this Clause should remain in the Bill. I want to deal with one or two red herrings laid by the Financial Secretary to the Treasury. First, he said that this proposal was an integral part of the Budget, that the money was essential in order to get the right disinflationary, above-the-line surplus—that is not the way he said it, but it is what he meant—also to minimise the amount which would need to be borrowed on the Budget, both below and above-the-line.
My hon. and learned Friend the Member for Kettering (Mr. Mitchison) and others asked, "Why not be a little less generous with Surtax concessions?" The hon. Gentleman answered that that had nothing to do with this year, but with next year. When I suggested, in an intervention, that he should limit this emergency taxation to deal with the current financial emergency to one year, and then get his £25 million by knocking it off the Surtax concessions next year, we were told that the Chancellor could not anticipate next year's Budget statement.
The Financial Secretary was anticipating that statement, however, because he suggested that I might like to put down a new Clause next year. If it is appropriate to deal with this point by a new Clause, that means that there will be nothing in the Bill next year dealing with these things, which suggests that the Chancellor has already made up his mind. Or perhaps it is the Financial Secretary who has already made up his mind. We know the powerful influence which he has had on a string of Tory Chancellors, all of whom have accepted "Boyle's Law", apart from the present Chancellor, who has turned it into "Lloyd's Law", which is even worse. Either the Chancellor or the Financial Secretary has decided that there will be no change next year, so we are legislating here not only for this year, but for a year or two ahead.
The other argument, which the Financial Secretary went to great lengths to dispose of—as he thought—was my suggestion that, instead of a flat-rate tax there should be a tax related to space, to the size of cars. He turned out the old argument that we have heard so often by quoting Lord Dalton in 1947. I knew that that was coming. The Government Front Bench becomes more and more predictable on these things. In the Financial Times, before the Budget, I wrote that the Chancellor would increase vehicle licence duties and include a piece about roads in his statement to justify it. I can assure the Committee that there was no collusion between the Chancellor and myself about that matter. That, of course, is what he did, and one can always be sure that the argument about distortion of engine design will be brought up.
Lord Dalton was right in what he did in taking a flat-rate in 1947 rather than continuing with the horsepower tax, because, at that time, the motor car industry—and it was dead right on the facts known then—thought that Britain, to get into the modern export market, must produce larger cars than we were producing then. That was true then, but it is not true today.
In preparation for today's debate—because one can usually see this sort of thing coming up—I put a Question to the President of the Board of Trade some months ago about exports. I asked him what was the contribution to our exports, first, generally to all countries, and, secondly, to the dollar area made by all large, medium and small vehicles. I have not the figures immediately before me, but they are in HANSARD, and they confirm what most hon. Members would expect—that the greater proportion of our export competitors are in small and medium sized cars and not in the larger cars. There are some first-class specialities—one can think of the new Jaguar, for instance, for which there is a long waiting list—but on the Chancellor's age-old argument that one wants to increase taxation to push more of these cars abroad, there would be no loss of exports there.
There is a great deal to be said for placing this tax on space. At present, I am not even arguing about the total amount of revenue that he could get. If

he had to have additional revenue, he might have got it that way, however. But one of the major developments in our motoring conditions since Lord Dalton was Chancellor of the Exchequer is the utter congestion in urban areas. We go on building these major roads on an all too inadequate scale, but when the roads debouch in our towns and cities the problem really starts.
For this reason I changed some months ago from a medium-sized car to a small one. I will give the Chancellor a lift in it some time. He would see with what relative ease and nippiness one can get round the traffic in Central London, in so far as one can move at all in Central London, and certainly much better than the larger cars, which are to be taxed at the same rate. There is some advantage, from the point of view of economising in the very scarce road space which we have in our towns and cities and in parking space, in devising this tax in that way.
4.30 p.m.
There is another point which has a direct bearing on the balance of payments. There are some of our fellow citizens, and perhaps it is not for us to condemn them—it is probably more a matter for psychiatrists and economists—Who insist upon having these very large American cars on what are called prestige grounds. I do not mind if people feel like that about it. One must have driven in London, as I expect many hon. Members have done, behind these great flat cars, looking rather like aircraft carriers, holding up the traffic, because of this so-called prestige desire.
If it is the desire of certain people to have these cars, and I do not exaggerate the number, the Chancellor is involved in a certain amount of foreign exchange, and when they come here, whether they are parked or in motion or trying to be in motion, the effect is detrimental to the interests of other road users. Why should they occupy so much of our road space and pay only £15 in taxation, when the Chancellor is laying down that a 10-year-old, second-hand Ford Anglia, a small Morris or Austin, or whatever it may be, should have to pay tax at a similar rate?

Mr. Raymond Gower: Surely the right hon. Gentleman will agree that we ought to be diffident when we are


talking about these cars. They carry a substantial import duty, and we are trying to export our own cars.

Mr. Wilson: I was speaking with very great diffidence, and I made it quite clear that I am not condemning them, because I think that it is more a matter for a psychiatric or economic approach. Of course, they carry some import duty. The idea of an import duty is to keep them out, but if they do come in they pay an import duty, and to that extent the import duty is failing as a protective device. The hon. Gentleman cannot have the import duty argument both ways.
However that may be, if the Chancellor was to touch vehicle duty at all, he ought to have looked at this proposal. It would not have involved, in my opinion, any loss of exports. The hon. Member for Ormskirk (Sir D. Glover) suggested that just as the horsepower tax led to a distortion of engine design, this might lead to a distortion of body design. I do not believe that for a moment. I believe that in present circumstances we are doing extremely well with our small cars, and I doubt whether there has been any distortion effect as a result of this tax. It would have been of value in encouraging more small cars both for the benefit of the British motorist and our export trade. If there is anything in this distortion argument, it would have been favourable and not unfavourable as in the case of the horsepower tax.
Let us now leave the question whether the Chancellor should have done it in this way, and consider whether this is a fair increase in taxation. The Financial Secretary to the Treasury used some odd arguments. One was that in terms of real value, money changes in prices, and so on, the motorist today is not paying any more, indeed, he is paying less in real value, than was paid by his predecessor or perhaps himself twenty, thirty or even forty years ago. This is a very strange argument, and if this is a new "Boyle's Law" that is to be applied to our taxation system, I advise hon. and right hon. Gentlemen opposite to sell their gin and whisky shares, because there has been no increase in the taxation of gin and whisky for thirteen or fourteen years, during which time most other prices have moved up very rapidly.
If the new "Boyle's Law" is to be applied, there is no doubt that the hon. Gentleman is already advising the Chancellor that to bring it into line with the retail prices index there will have to be an increase in the taxation of gin and whisky. I do not think that the Chancellor will listen to him, because gin and whisky are the sumptuary taxes of interest to hon. and right hon. Gentlemen opposite. I think that probably, on the whole, the Chancellor will not listen to the Financial Secretary.
On the question of the £15 tax, we do not suggest—and I made this clear in the Budget debate—that this will involve a great deal of hardship for every motorist. There are very many who are well able to pay this tax. There is no doubt about that at all. Indeed, I have been arguing that some could pay a vastly increased tax if it were based on the size of the car. I will not suggest that every motorist would be driven into bankruptcy, penury, or hardship, or be forced to sell his car as a result, but there are some who will be hit by it.
As a result of various developments in the past few years, more people have been buying cars, and a lot of them are second-hand. Indeed, the whole motor car boom of the last few years has inevitably been based upon a ready market for second-hand cars. It could not have taken place otherwise. We were always told that it was the hire-purchase boom in motor cars that did more than anything to get hon. and right hon. Gentlemen opposite back into office at the last General Election. Some people thought that it was to be a cut in the Beer Duty, and now the Chancellor is taking power to increase it; and indeed, is giving himself power without coming to Parliament to ask permission. I would be out of order in pursuing that at this time of day, but I would not be out of order in saying that hon. Members opposite, having made so much in the last election of a greater spread of car ownership in this car-owning democracy, are now, the election being over, asking for and insisting upon an increase in the rate of taxation on cars.
I have had a number of letters, as I expect other hon. Members have done, not from the owners of Rolls-Royces—it is Clause 20 to which they object—but from the owners of new or second-hand cars which they are buying on hire


purchase, which are mainly family cars used to take people to work and also used for an occasional trip to the seaside. Such a car is used—and this occurs in a great number of my letters—perhaps by old-age pensioners, who have aged cars, which they keep solely for the purpose of taking, say, a sick wife out for a run in the afternoon. These are important considerations in our social life.
Perhaps the people who own many of these old cars are people living on small fixed incomes, or retired people. We all know of them, and we could give examples of them. We all know, too, the dangers which people like this have to face. Because the cars are rather old they may find themselves let in at any time for rather heavy expenditure in making good some damage, breakdown or repair, and on top of all this they are now to be asked to pay a tax of £15 instead of £12 10s. I think that the Chancellor should have approached this problem in another way.
There is also the problem of the scattered rural area, which has been referred to by hon. Members. There is an extent to which cars are now becoming an economic necessity rather than a social necessity in certain parts of the country.
There is one last point which the Chancellor will remember I mentioned in the Second Reading debate, and to which I should like the Financial Secretary to refer. It is the inequality in the composition of the tax between people who licence their cars for a year ahead, and those who licence them only for three or four months ahead. Most people who can afford to do so, and who expect to keep their cars on the road pay for the licence for the whole year, and then, I suppose, go on the road until the 11th or 12th of January before discovering that the licence has expired. Sometimes, they wonder whether they should take the car on the road on the 15th when the licensing authority has not returned the licence.
Many people do not know for a year ahead whether they will keep their car on the road, while others have not got the ready money with which to pay for the licence for the whole year. There may be some doubt whether they will have the car on the road for a few months or longer, and it is a fact, as this correspondence has suggested, that those who

licence their cars only from January to April, as opposed to those who licence them until the following December, will now have to pay the higher rate of tax from April onwards, whereas those more fortunate among us who decide to licence their cars for a whole year ahead are in the position of not starting to pay the increased duty until 1st January next.
If that is the case, as I believe it to be, the Chancellor might have put everyone on a par by introducing this new tax on the same date for everyone, namely, 1st January, next year. For the reasons I have given and for the good reasons which my hon. and learned Friend the Member for Kettering (Mr. Mitchison) gave, it is quite clear that we cannot support the Government in this proposal.
The Chancellor obviously decided that motor cars were a sitting target for his predatory instincts. I think that he would have liked to have gone for petrol and I bet that the Financial Secretary was telling him about the need to increase petrol taxation on the line of the argument he used today. We all know why the Chancellor did not increase the petrol tax—because he and I—perhaps only we two—remember the speeches which he made in 1950 and 1951 when the Labour Government increased the petrol tax to a figure not as high as that which stands today. No doubt the Chancellor has enough of a memory and enough of a conscience—which is not something always associated with Chancellors—to realise that if he had he would have been very vulnerable to attack, because his speeches are on the record. They were fine, eloquent speeches all attacking a rate of petrol taxation which is a good deal lower than he is maintaining.
Because he could not increase the petrol tax and because he obviously gets annoyed every time he is approached by the Minister of Transport—and who would not be?—in relation to the road programme, he obviously felt that he must do something about getting taxation out of the motorist. He could not put it on the Purchase Tax on cars and he could not put it on the petrol tax, because he has a fiscal past in this matter, so he decided that an increase of licence duty was the best way.
If he had to do it, why did he not do it on the size of vehicles? We do not feel that he had to do it. In view of his prospective generosity and the extent to which he is anticipating next year's Budget statement in a most unusual fashion in relation to Surtax, it does not seem to us necessary to have this increase

in this flat rate of tax and we propose to show our hostility to the proposal in the Division Lobby.

Question put, That the Clause stand part of the Bill:—

The Committee divided: Ayes 192, Noes 129.

Division No. 181.]
AYES
[4.43 p.m.


Agnew, Sir Peter
Fisher, Nigel
Nugent, Sir Richard


Allason, James
Fletcher-Cooke, Charles
Oakshott, Sir Hendrie


Arbuthnot, John
Foster, John
Osborn, John (Hallam)


Ashton, Sir Hubert
Gammans, Lady
Page, John (Harrow, West)


Atkins, Humphrey
Gardner, Edward
Page, Graham (Crosby)


Barber, Anthony
Glover, Sir Douglas
Pannell, Norman (Kirkdale)


Barlow, Sir John
Glyn, Dr. Alan (Clapham)
Pearson, Frank (Clitheroe)


Baxter, Sir Beverley (Southgate)
Glyn, Sir Richard (Dorset, N.)
Peel, John


Bell, Ronald
Goodhew, Victor
Percival, Ian


Bennett, Dr. Reginald (Gos &amp; Fhm)
Gough, Frederick
Pike, Miss Mervyn


Berkeley, Humphry
Gower, Raymond
Pitt, Miss Edith


Biggs-Davison, John
Grant, Rt. Hon. William
Price, David (Eastleigh)


Bingham, R. M.
Green, Alan
Pym, Francis


Birch, Rt. Hon. Nigel
Gresham Cooke, R.
Quennell, Miss J. M.


Bishop, F. P.
Grimston, Sir Robert
Rawlinson, Peter


Black, Sir Cyril
Gurden, Harold
Redmayne, Rt. Hon. Martin


Bossom, Clive
Hamilton, Michael (Wellingborough)
Rees, Hugh


Bourne-Arton, A.
Harris, Frederic (Croydon, N.W.)
Renton, David


Boyd-Carpenter, Rt. Hon. John
Harrison, Brian (Maldon)
Ridsdale, Julian


Boyle, Sir Edward
Harvey, Sir Arthur Vere (Macclesf'd)
Robertson, Sir David


Braine, Bernard
Hastings, Stephen
Roots, William


Brewis, John
Heald, Rt. Hon. Sir Lionel
Seymour, Leslie


Bromley-Davenport, Lt.-Col. Sir Walter
Hiley, Joseph
Sharples, Richard


Brown, Alan (Tottenham)
Hocking, Philip N.
Skeet, T. H. H.


Browne, Percy (Torrington)
Holland, Philip
Smith, Dudley (Br'ntf'rd &amp; Chiswlck)


Buck, Antony
Hollingworth, John
Smithers, Peter


Bullard, Denys
Hopkins, Alan
Smyth, Brig. Sir John (Norwood)


Bullus, Wing Commander Eric
Hornby, R. P.
Spearman, Sir Alexander


Burden, F. A.
Hughes-Young, Michael
Speir, Rupert


Butler, Rt. Hn. R. A. (Saffron Walden)
Hulbert, Sir Norman
Stevens, Geoffrey


Campbell, Sir David (Belfast, S.)
Hutchison, Michael Clark
Stoddart-Scott, Col. Sir Malcolm


Campbell, Gordon (Moray &amp; Nairn)
Iremonger, T. L.
Studholme, Sir Henry


Carr, Compton (Barons Court)
Jackson, John
Talbot. John E.


Channon, H. P. G.
James, David
Tapseli, Peter


Chataway, Christopher
Jenkins, Robert (Dulwich)
Teeling, William


Clark, William (Nottingham, S.)
Kitson, Timothy
Temple, John M.


Cole, Norman
Lambton, Viscount
Thomas, Leslie (Canterbury)


Collard, Richard
Langford-Holt, J.
Thompson, Kenneth (Walton)


Cooke, Robert
Leavey, J. A.
Thompson, Richard (Croydon, S.)


Cooper-Key, Sir Neill
Leburn, Gilmour
Turner, Colin


Cordeaux, Lt.-Col. J. K.
Legge-Bourke, Sir Harry
van Straubenzee, W. R.


Cordle, John
Lindsay, Martin
Vaughan-Morgan, Sir John


Corfield, F. V.
Linstead, Sir Hugh
Vickers, Miss Joan


Costain, A. P.
Litchfield, Capt. John
Vosper, Rt. Hon. Dennis


Coulson, J. M.
Lloyd, Rt. Hon. Selwyn (Wirral)
Wakefield, Edward (Derbyshire, W.)


Craddock, Sir Beresford
Longden, Gilbert
Walder, David


Critchley, Julian
Loveys, Walter H.
Walker, Peter


Crosthwaite-Eyre, Col. O. E.
Low, Rt. Hon. Sir Toby
Wall, Patrick


Cunningham, Knox
Lucas. Sir Jocelyn
Watkinson, Rt. Hon. Harold


Curran, Charles
Lucas-Tooth, Sir Hugh
Watts, James


Dalkeith, Earl of
McAdden, Stephen
Webster, David


d'Avigdor-Goldsmid, Sir Henry
McLaren, Martin
Wells, John (Maidstone)


Digby, Simon Wingfield
Macmillan.Rt.Hn. Harold (Bromley)
Whitelaw, William


Drayson, G. B.
Macmillan, Maurice (Hallfax)
Williams, Dudley (Exeter)


du Cann, Edward
Maddan, Martin
Williams, Paul (Sunderland, S.)


Duncan, Sir James
Marlowe, Anthony
Wills, Sir Gerald (Bridgwater)


Duthie, Sir William
Marten, Neil
Wilson, Geoffrey (Truro)


Eccles, Rt. Hon. Sir David
Matthews, Gordon (Merlden)
Wise, A. R.


Elliot, Capt. Walter (Carshalton)
Mawby, Ray
Wolrige-Gordon, Patrick


Elliott, R. W. (Nwcastle- upon-Tyne, N.)
Maxwell-Hyslop, R. J.
Woodnutt, Mark


Emmet, Hon. Mrs. Evelyn
More, Jasper (Ludlow)
Worsley, Marcus


Errington, Sir Eric
Morrison, John
Yates, William (The Wrekin)


Farr, John
Mott-Radclyffe, Sir Charles



Fell, Anthony
Nicholson, Sir Godfrey
TELLERS FOR THE AYES:


Finlay, Graeme
Noble, Michael
Colonel J. H. Harrison and




Mr. J. E. B. Hill.




NOES


Ainsley, William
Benson, Sir George
Bowen, Roderic (Cardigan)


Allaun, Frank (Salford, E.)
Blyton, William
Boyden, James


Allen, Scholefield (Crewe)
Bowden, Herbert W. (Leics, S.W.)
Brockway, A. Fenner




Broughton, Dr. A. D. D.
Houghton, Douglas
Randall, Harry


Brown, Rt. Hon. George (Belper)
Hughes, Emrys (S. Ayrshire)
Rankin, John


Butler, Herbert (Hackney, C)
Hughes, Hector (Aberdeen, N.)
Reid, William


Castle, Mrs. Barbara
Hunter, A. E.
Roberts, Alfred (Normanton)


Chapman, Donald
Hynd, H. (Accrington)
Roberts, Goronwy (Caernarvon)


Chetwynd, George
Janner, Sir Barnett
Robertson, John (Paisley)


Collick, Percy
Jay, Rt. Hon. Douglas
Ross, William


Craddock, George (Bradford, S.)
Jeger, George
Silverman, Sydney (Nelson)


Crosland, Anthony
Johnson, Carol (Lewisham, S.)
Skeffington, Arthur


Cullen, Mrs. Alice
Jones, Rt. Hn. A. Creech (Wakefield)
Slater, Mrs. Harriet (Stoke, N.)


Darling, George
Jones, Dan (Burnley)
Slater, Joseph (Sedgefield)


Davies, Rt.Hn. Clement (Montgomery)
Jones, Elwyn (West Ham, S.)
Small, William


Davies, Harold (Leek)
Kelley, Richard
Stewart, Michael (Fulham)


Davies, S. O. (Merthyr)
Kenyon, Clifford
Stonehouse, John


Deer, George
Key, Rt. Hon. C. W.
Stones, William


de Freitas, Geoffrey
Lee, Frederick (Newton)
Strachey, Rt. Hon. John


Diamond, John
Lever, L. M. (Ardwick)
Strauss, Rt. Hn. G. R. (Vauxhall)


Dodds, Norman
Lipton, Marcus
Stross,Dr. Barnett (Stoke-on-Trent, C.)


Driberg, Tom
MacColl, James
Swingler, Stephen


Dugdale, Rt. Hon. John
McInnes, James
Symonds, J. B.


Edwards, Robert (Bilston)
McKay, John (Wallsend)
Taylor, John (West Lothian)


Edwards, Walter (Stepney)
McLeavy, Frank
Thompson Dr. Alan (Dunfermline)


Evans, Albert
McPherson, Malcolm (Stirling)
Thomson, G. M. (Dundee, E.)


Fitch, Alan
Mallalieu, E. L. (Brigg)
Thornton, Ernest


Foot, Dingle (Ipswich)
Manuel, A. C.
Thorpe, Jeremy


Foot, Michael (Ebbw vale)
Marquand, Rt. Hon. H. A.
Tomney, Frank


Fraser, Thomas (Hamilton)
Mitchison, G. R.
Ungoed-Thomas, Sir Lynn


Galpern, Sir Myer
Morris, John
Wade, Donald


Ginsburg, David
Oliver, G. H.
Wainwright, Edwin


Gordon walker, Rt. Hon. P. C.
Oram, A. E.
Warbey, William


Griffiths, David (Rother Valley)
Oswald, Thomas
Weitzman, David


Griffiths, Rt. Hon. James (Llanelly)
Owen, Will
Wells, Percy (Faversham)


Griffiths, W. (Exchange)
Pannell, Charles (Leeds, W.)
White, Mrs. Eirene


Grimond, J.
Parker, John
Wilkins, W. A.


Hall, Rt. Hn. Glenvil (Colne Valley)
Peart, Frederick
Willey, Frederick


Hamilton, William (West Fife)
Plummer, Sir Leslie
Willis, E. G. (Edinburgh, E.)


Hannan, William
Prentice, R. E.
Wilson, Rt. Hon. Harold (Huyton)


Hart, Mrs. Judith
Price, J. T. (Westhoughton)
Woof, Robert


Hayman, F. H.
Probert, Arthur



Herbison, Miss Margaret
Proctor, W. T.
TELLERS FOR THE NOES:


Holman, Percy
Pursey, Cmdr. Harry
Mr. Lawson and Mr. McCann.

Schedule 2.—(NEW RATES OF VEHICLES EXCISE DUTY.)

Mr. Mitchison: I beg to move, in page 32, to leave out lines 33 to 38 and to insert:


3. Farmers' goods vehicles
—
12 cwt.
10
0
0

—



12 cwt.
16 cwt.
10
10
0

—



16 cwt.
1 ton
11
0
0

—



1 ton
2½ tons
11
0
0
0
10
0


2½ tons
3 tons
14
0
0
1
0
0


3 tons
—
16
0
0
0
10
0

The Schedule contains the rates which are proposed for, among other things, farmers' goods vehicles. The object of the Amendment is to insert in the Schedule the rates which are at present operative under the 1949 Act. Accordingly, the effect of the Amendment when the Government accept it and the Committee carries it will be to leave farmers' goods vehicles in their present position.

Something has already been said about the position in relation to farmers' goods vehicles, and I do not wish to take up an undue time by developing the matter. But I suggest to the Committee that there is a particularly strong case in respect of these vehicles.

We heard the hon. Member for King's Lynn (Mr. Bullard) quite rightly explain-

ing that it is bad policy and bad sense to put a tax of this sort on farmers and then expect them to get it back in the Price Review. That is a thoroughly unsound and confused way of trying to deal with matters. If this increase is made and nothing more is done about it, the farmers will be justified in saying that the costs of farming have gone up by exactly the amount of the increase, whatever other increases or decreases there may have been, and to claim accordingly.

What we are dealing with here is not in general a question of crowded roads nor of the form of the tax. It is probably the simplest of all the categories of vehicles which we have to consider. Horses are not yet taxed. A farmer who uses a pair of horses over his farm would


not have to pay tax on their shoes or on anything else to do with them. Yet, if in carrying out the ordinary principles of modern farming he uses farmers' goods vehicles either there or for carrying his produce to market, he will by this Clause not only pay tax but will suffer an increase in taxation.

I have heard no reason given for this. We were told that the Clause as a whole was an integral part of the right hon. and learned Gentleman's Budget. That may very well be—I am not at the moment concerned with that—but I see no reason why there should be complete unanimity in the Clause, and, indeed, we were told on Second Reading that there was not a complete similarity between the increases in taxation in every case. I think that the figures given were that in some cases it was 18 per cent., in others 25 per cent., and so on. I can see no reason whatever why farmers' goods vehicles should suffer this increase.

In addition, there is the general point about any taxation of this kind on farmers What we are taxing in this instance is the tools of the farmers' trade, as it were, and the result is bound to be that at any rate some of that increase, however much or little it may be in this case, will be passed on to the consumer and contribute to increasing the price of food. If, again reverting to something said in connection with the Clause as a whole, the farmer happens to farm in a remote area, the costs of his transport, including the cost of this increase, will be passed on, and will form a considerable amount of the ultimate cost to him of what he has produced and is taking to market.

From every point of view, I can see no real case whatever for this increased tax on farmers' goods vehicles at the moment, whatever may be said about it in connection with the ordinary private car. I do not, of course, withdraw a word of what was said in the previous debate or what was implied in our dividing on the Clause as a whole. We are here asking the Committee to take out this class of vehicles.

I often wonder how hon. Gentlemen opposite manage with their constituents in rural areas when they come to matters like this. It is just conceivable, of course, that farmers do not read all

the debates on the Finance Bill with the care that they no doubt direct to growing crops. Perhaps they have not the time to do so, and it may be that hon. Gentlemen opposite escape in that way, but if they did read our debates I wonder what the farmers would say to themselves when they read that the Tory Party, so many of whose Members represent rural areas, trooped through the Lobbies to increase the tax on farmers' goods vehicles. I myself would find it rather shocking.

Do not hon. Members opposite feel that they have a moral duty to confess to their constituents what they have been doing on this afternoon in early June; going through the Lobbies to put up the cost of using farmers' goods vehicles—

Mr. Raymond Gower: The glorious first of June.

Mr. Mitchison: I think the hon. Gentleman said something, but as I suffered the great misfortune of not carolling exactly what he said, I cannot answer him.
I repeat—and I do not wish to take up more time—that whatever may be said about the merits of the Clause as a whole, there is no reason for this increase. It will either be suffered by the farmer and passed on to the consumer in higher prices for agricultural prices or, if that is not the case, what has been taken from the farmer by the Exchequer will be taken out of the consumer by a rise in prices at the next Annual Price Review. It is on those grounds that we ask the Committee to reject this increase. The words in the Amendment, I repeat, merely adhere to the present rate of duty on farmers' goods vehicles.

5.0 p.m.

The Economic Secretary to the Treasury (Mr. Anthony Barber): As the hon. and learned Member for Kettering (Mr. Mitchison) has rightly said, the effect of this Amendment would be to restore the vehicle excise licence duty on farmers' goods vehicles to their pre-Budget level. I was a little surprised that in deploying his case the hon. and learned Gentleman did not, as far as I can recollect, say a word about the exceptional position that existed before the Budget and still does exist in relation to the duty paid on these vehicles. Before making up its


mind on the Amendment, the Committee ought to know of this special position.
There are special rates of licence duty for farmers' goods vehicles that date back to 1928; indeed, the rates have been virtually unchanged since 1933, which is a period of nearly 30 years. I should like to give the Committee one or two examples of the position. For an unladen weight of 1 ton the rate of duty on these vehicles is £13 10s., which represents a concession of 25 per cent. when compared with the normal goods vehicle rate of £18. At 3 tons, the duty is £19 5s., which means a concession of 55 per cent. compared with the £42 paid in respect of an ordinary goods vehicle. At 5 tons, the duty payable is £23 5s., and there the concession amounts to no less than 72 per cent., compared with the £84 paid in respect of normal goods vehicles. Further, as I think the Committee will remember—although I do not want to go into this in detail—farmers already enjoy a very special concession on farm tractors, paying only a nominal rate of £2 10s. a year for a licence.
The hon. and learned Gentleman referred to the Price Review and was quite right in thinking that the cost to the agricultural industry of the increased vehicle licence duty will be taken into account along with any other cost changes at the next Annual Price Review. The increase in vehicle excise licence duties is, as my hon. Friend the Financial Secretary said in the previous debate, a general one of 20 per cent. The hon. and learned Gentleman mentioned fairly that the rates varied somewhat, but I would remind him that the only reason for that variation from the general figure of 20 per cent. is ease of administration; in other words, the figures are rounded either up or down in order to make administration easy.
These increases are applied to vehicles of all descriptions, except for certain invalid carriages, ambulances and so on—and they do not apply to buses and coaches, which were dealt with recently. Farmers' goods vehicles, as I have indicated, already enjoy specially low rates—and rates that have been virtually unchanged for nearly thirty years—and, in any event, the increased cost will be taken into account at the next Annual Price Review—

Mr. Jay: Is it the hon. Gentleman's argument that if any tax has remained unchanged for thirty years it should therefore be increased?

Mr. Barber: Most certainly not. All I am pointing out is that it seems to me that if one is considering whether or not this is an undue burden it is relevant to study the history of these duties. If, for example, the duty had gone up in each of the previous five years, I think that the right hon. Gentleman would have had an argument for saying that we should not have made a further increase this year. It is a consideration that should be taken into account. With that in mind, and bearing in mind also the fact, as I have said, that any increase in cost will be taken into account at the next annual Price Review, I do not think that the Government are making an unreasonable proposal. I must therefore ask the Committee to reject the Amendment.

Mr. John Wells: I was very distresed to hear my hon. Friend say three times over that the Government hope to restore this cost to the farmers at the Price Review. Many horticulturists, particularly apple growers, own goods vehicles and their difficulties are never put right at the Price Review. They cannot be. Time and again the Government say privately—or, as my hon. Friend did a moment ago, publicly—that they will do what they can to improve things for the farming community at the Price Review, but that cannot be done for horticulturists. I should therefore like to ask him whether, even at this late hour, he cannot think particularly about their position.

Mr. Emrys Hughes: Representing, as I do, a very large number of farmers, I found the Minister's reply rather unsatisfactory, and when I come to explain it to the Conservative farmers of South Ayrshire I fear that I shall find difficulty in putting up a reasonable defence of the Minister. It is quite true that there are certain concessions for farmers' tractors and agricultural vehicles. I do not see that there is any necessity for the Minister to make any elaborate apology for that, because the more we encourage farm mechanisation the less will be the necessity for employing manual labour.
These 30-year-old tax concessions on tractors have certainly helped forward what those of us who represent agricultural constituencies must realise is a very important development. We are all for increased mechanisation, but I should like to know to what extent this taxation will apply to tractors and mechanical vehicles engaged in potato lifting. That has always been a very sore point in agricultural areas.
I was for many years a member of the Ayrshire County Council, where we had this perennial question of whether schoolchildren should or should not be employed in the ardous work of potato lifting. It was a very serious matter for those people who thought that the education of the children should have priority over the interests of the potato growers.
I frequently said that it was rather strange that although we had been able to develop many intricate mechanical devices and machines in many parts of the economy, we were told that it was not yet possible to get a mechanical potato lifter. I understand that there have been steps forward in that direction—whether or not as a result of my numerous speeches and my attempts to instigate this particular activity, I do not know. Be that as it may, now that there is the possibility of the development of a mechanical potato lifter dragged by a tractor, along comes the Minister with this increased tax. I would not call that encouraging the farmers to proceed further with the mechanisation of potato lifting, and doing by machines work now done by the drudgery and exploitation of school-children—and especially the poorer children—

The Temporary Chairman (Sir Samuel Storey): I think that the hon. Gentleman is getting wide of the Amendment. A potato lifter is not an agricultural goods vehicle.

Mr. Hughes: I was merely asking whether these new machines were classified in this way. I submit, Sir Samuel, that I did not expect to get that assurance from the Chair.

The Temporary Chairman: I did not give the hon. Member any assurances. I called his attention to the fact that he

was going wide of the Amendment, which deals with agricultural goods vehicles—but not with potato lifters.

Mr. Hughes: Surely a tractor that drags a potato lifter might be classified as an agricultural goods vehicle. I was merely asking for an assurance from the Minister. I do not usually get such help from the Chair. However, I would like the Minister to tell me whether, if this Amendment were accepted, it would be welcomed by the farmers who wish to increase mechanisation on their land.
Does not the Minister think that the National Farmers' Union, for example, will be greatly indebted to the Opposition for moving this Amendment and that South Ayrshire will be indebted to their hon. Member for putting their point of view on this question?

Mr. Gower: I wish merely to comment on what my hon. Friend the Parliamentary Secretary has just said. It was a legitimate argument for him to call attention to the already low rate of this tax and the fact that it has remained low for such a long time. I disagree with hon. Gentlemen opposite who do not think that that is a valid argument. It is, I submit, an extremely material argument.
Since the Parliamentary Secretary went on to say how small these increases are—and hon. Gentlemen opposite will not deny that they are very small indeed—I urge hon. Members to look at the proposed Amendment and at the original Schedule. They will notice that, in most cases, the increase is about £1 10s. per annum on such vehicles. Hon. Gentlemen cannot contend that that is a severe impost on the industry.

Mr. Hughes: It is 20 per cent.

Mr. Gower: That may be so, but the Parliamentary Secretary went a stage further in his reply. He said, in effect, that the increase, small as it is, will be taken into account at the Annual Price review. [Interruption.] I cannot reply to all the interventions at once.

Mr. William Ross: Nonsense.

Mr. Gower: It is not nonsense because, as the hon. Gentleman must be aware, the Annual Price Review takes account of all the material circumstances, of which this is merely one.

Mr. Ross: I appreciate that they are taken into account. That does not mean that the increase will be made up. It may be, as has always happened to farmers, they will be asked to carry a considerable percentage of the increased costs, of which this may be one.

Mr. Gower: But even accepting the hon. Gentleman's argument as it is, the worst that could happen is that a small percentage of this already small increase will be borne by the industry.
We all know that the increase per vehicle will be very small. We know, as the Parliamentary Secretary said, that it has remained low for many years. I think my hon. Friend said that it has remained unchanged since 1933, or perhaps 1928. As I say, the worst that can happen is that some marginal part of this very small increase may be disregarded in the Annual Price Review.

Mr. Jay: The hon. Gentleman has not grasped the point that the Annual Price Review does not apply to the horticultural industry.

Mr. Gower: I intended to deal with that subject, because that is a special case. I was dealing with the general case as it affects farmers as opposed to horticulturists. This increase is so modest and so slight, and in view of the assurances that have been given by the Parliamentary Secretary, I should not have thought that the Opposition would have felt it necessary to press this Amendment to a Division.
5.15 p.m.
On the other hand, I feel that the Parliamentary Secretary may agree that a point of considerable validity has been made out about the position of the horticultural industry. While I agree that it may be extremely difficult to differentiate, I wonder if my hon. Friend can say whether he will give further attention—even at this late stage—to this particular problem covering a relatively narrow but nevertheless important field.

Mr. Michael Foot: I cannot claim to represent the wide farming and agricultural interests which my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) so notoriously represents in the House. As usual, I speak only in the public interest.
My hon. and learned Friend the Member for Kettering (Mr. Mitchison) opened this debate by saying that he found it surprising that hon. Members opposite who claim to be the custodians of the agricultural industry were showing little interest in the imposition of this new tax. My hon. and learned Friend wondered how they could salve their consciences; how they were able to troop through the Lobbies with so little sign of protest and vote for this part of the Chancellor's Budget.
The Parliamentary Secretary, in his reply, revealed why hon. Members opposite are so acquiescent. The reason has already come out in the debate. The reason why hon. Gentlemen who are supposed to represent agricultural interests are so acquiescent is that they have had an assurance from the Parliamentary Secretary that this fresh instance of taxation will be taken into account when the Annual Price Review takes place. But I must point out that my hon. Friend the Member for Kilmarnock (Mr. Ross) asked what was the meaning of the words "taking account of this new tax". Hon. Members are entitled to an answer to that question. The Parliamentary Secretary should tell us whether, in fact, the whole of this fresh impost will be taken into account or just a part of it, say 50 per cent. of it. He should indicate exactly what he means.
Naturally, the clearer the Parliamentary Secretary makes his case the greater will be his dilemma. If he says that 100 per cent. of the increase will be taken into account when the Annual Price Review takes place, then there is no reason why he should not accept the Amendment. The hon. Member for Barry (Mr. Gower) does not seem to realise that his speech represented powerful support for the Amendment, because he said that only a tiny fraction of the tax will be left over to be borne by the agricultural community and that the bulk of it will be taken into account at the Annual Price Review. In that case the hon. Member for Barry should not have very much objection to the Amendment.
But there is a constitutional reason why this Clause should be amended. If benefits are to be given to the agricultural community, it is better that it should be known precisely what are the benefits. It should be made known to


the whole community that special provision is being made to assist the farming community in this respect. They should be able to recognise exactly what is happening instead of being faced with the existing muddle of things being taken into account at the Annual Price Review and things not being taken into account. Therefore, no case has been presented why the Amendment should not be accepted.
Even the arguments used by the Parliamentary Secretary could equally be used in favour of the Amendment. He said that the present low rate has been maintained for nearly thirty years. Why has the farming community, in various Budgets, been given this special advantage? Some hon. Members think that the farming community is treated much more lavishly and generously than many other industries. The coal industry, for instance, does not get any of the benefits given to the farming industry. The Committee has recognised, for one reason or another, that special benefits should be given to the agricultural community—and that is why this system has gone on for thirty years, despite the eagerness of Chancellors, year after year, to find means of closing gaps and loopholes and to deal with anomalous situations. Therefore, for thirty years it has been the accepted view that if we are going to give these particular benefits to the farming community then the whole House of Commons should know about the matter and that it should be apparent in the Budget itself.
What the Government are really saying by rejecting this Amendment—which gets the Government out of a hole into which they would get by rejecting it—is, "Instead of making it clear that special provisions are made on behalf of the farming community we now want it taken out of the Budget and put into the field of the Annual Price Review." That will make it more difficult for the House and the country to understand exactly what are the benefits and the subsidies given to the farming community.
There are many hon. Members who believe that if the country knew how large and persistent over many years has been the amount of subsidies which the Government have been prepared to give to the farming community it might want

to examine it in greater detail. What the Government are proposing, instead of clarifying the situation, will muddle it up.

Mr. Gower: I am grateful to the hon. Gentleman for giving way. He is really implying, although he has not actually said it expressly, that if the Amendment were accepted that clear position would obtain. But the tax already exists, and the only difference now would be that it would be very marginally increased. Therefore, the clear position which the hon. Gentleman is describing exists now.

Mr. Foot: I could not reply to the hon. Gentleman without repeating the whole of the argument which I have already made. The hon. Gentleman has repeated what he said before. What I was seeking to say was that the situation has been clear for thirty years that the agricultural community in this respect has a special advantage. What the Government are saying is that they do not want it to be clear any longer that the farming community is having this advantage and that they want to muddle it in the Annual Price Review.
I am asking the Minister to tell us exactly how much of these new taxes will be taken into account when we have the Annual Price Review and what it amounts to in terms of money. Let him tell us clearly now so that we may know what we are voting for. If he is not prepared to tell the farming community and this Committee the exact amount of money involved, then he ought to accept the Amendment. In doing so he would be much fairer to the Committee as a whole and would be ensuring that a situation which has been tolerable for thirty years, at any rate on the basis of its equality, should remain for another twelve months.

Sir D. Glover: I do not propose to detain the Committee for more than a few moments on this matter. I had no intention of speaking on the subject—

Mr. Willis: The hon. Gentleman has not heard the argument.

Sir D. Glover: I have heard every word that has been said.

Mr. Willis: The hon. Gentleman was asleep on the bench.

Sir D. Glover: I can assure the hon. Gentleman that I have followed the whole argument.
I believe that there is a great deal to be said for the argument put forward in support of the Amendment. I think it wrong to bring in an increase in taxation and at the same time to say that, in fact, farmers will have the increased taxation taken into account in the Annual Price Review, thereby leaving only the horticulturists, who are not covered by the Annual Price Review, to suffer the increased burden.
It is only the first line in the Amendment that affects nearly every horticulturist—the amount goes up from £10 to £12 in the Schedule—because all the larger items of equipment are certainly used by the agriculturists and not by the horticulturists. Could not my hon. Friend do something even at this late stage so as to ensure that the horticulturist is saved from this burden by reducing the tax on the 12-cwt. vehicle from £12 to £10 as it was before? In that case, the horticulturist would be saved the increased taxation and the agriculturist, on the other hand, would be saved it because it would be taken into account in the Annual Price Review.
The one segment of the population in the countryside which has found it increasingly difficult year by year to make ends meet is that of the horticulturists. Horticulturists are not protected by guaranteed prices. They suffer the competition of imports, and if there is any class in the countryside which is having difficulties it is certainly not the agricultural community but the horticultural community. I shall be grateful if my hon. Friend will look particularly at the first line of the Amendment with a view to seeing whether horticulturists could not be spared this tax. As I say, the farmer will avoid it because it will be taken into account at the Annual Price Review.

Mr. Ross: I hope that the Minister will think again about this matter. He has shown himself, I think, sensitive to the damage which might be done to farmers and farming by this increase. If he is really sincere about avoiding this damage being done there is only

one way in which he can do it, and that is by accepting the Amendment. It is no good saying that the matter will be taken into account at the Annual Price Review. It will mean that all the increases will be lumped together, this one as well as the others, and that a balance will be struck regarding what should be given to farming generally and what should be given in support prices and the rest. But there is no guarantee that, even if the whole matter is taken into account, the benefit would fall upon the individual farmer bearing the burden.
My hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) is quite right when he talks about the farmers in his area. I represent farmers in Kilmarnock. That area covers 300 square miles of upland farming as well as probably the richest pasturage in Scotland. We produce a tremendous amount of milk. Anyone who knows anything about the Annual Price Review knows that the one thing that the Government are not prepared to do is to give very much support nowadays to increasing milk production. Indeed, there has been a cutting down in relation to it, and that is likely to continue. But these farmers are still going to be hit by this tax and, in relation to any account taken of it in the Annual Price Review, they are not going to get any help.
If the hon. Gentleman really wants to ease the burden on the individual farmer the only way for him to do it is to reconsider the Second Schedule as a whole or to accept the Amendment, if he is not prepared to remove the offending part of the Schedule altogether.

Mr. William Hamilton: I disagree with my hon. and learned Friend the Member for Kettering (Mr. Mitchison) and other hon. Members who have spoken on this side of the Committee. I am against the Amendment because I think that the farmers gat far too much already. I do not see why we on this side of the Committee should defend them and try to get them a bit more. In any event, even if this tax is imposed, the farmers are going to get it back under the Annual Price Review, so what difference does it make?
Why are we wasting our time defending an industry which receives £250 million a year of taxpayers' money? I cannot see any logic in that at all.

Mr. Emrys Hughes: Is my hon. Friend aware that a large part of that £250 million goes back to the agricultural workers by way of guaranteed wages?

Mr. Hamilton: The agricultural worker is not all that enthusiastic about the guaranteed wage. He receives a much lower wage than the average industrial worker, and the sooner he is brought up to the scale of the industrial worker the better. My hon. Friend should remember that the Scottish farmers receive more in subsidies than they pay in wages.

Mr. Hughes: I quite understand my hon. Friend's indignation. We heard it in the Scottish Grand Committee. While it is true that some farmers get subsidies which may seem unjust, the fact remains that we could not do away with the agricultural subsidy without dealing a devastating blow to the agricultural worker.

5.30 p.m.

Mr. Hamilton: We can pursue this in Scottish Grand Committee. My hon. Friend and I have had these differences before, but he maintains his position and I maintain mine. But I object to my hon. Friends on the Front Bench putting down an Amendment supporting an industry when politically we do not get very much out of it. Why waste our time on these people?
There is another Amendment on the Paper dealing with local authorities' vehicles and seeking to exempt them from tax or to reduce the tax on them. Will the tax be taken into account when the general grant is assessed for local authorities? Perhaps when we reach that Amendment the Minister will tell us. But there is an Amendment dealing with showmen's goods vehicles, and showmen do not have a price review or a general grant. They will have to pay.
I would point out that this tax will be paid by small and big farmers alike but that, generally speaking, the Price Review benefits the big farmer rather than the small farmer. In other words, if this tax is taken into consideration in the Price Review, the money being repaid to the farmers will go to different people from those from whom it was taken.
What is a "farmer's goods vehicle"? I do not know the definition. My hon.

Friend the Member for South Ayrshire was in difficulties with the question, "When is a potato lifter a goods vehicle?" I do not know, and I do not think he knew. He was helped out by the Chairman, although I do not think the Chairman knew either.
I object to my own party putting down this kind of Amendment to help people who have never helped us.

Mr. Emrys Hughes: My hon. Friend the Member for Fife, West (Mr. W. Hamilton) has attacked me on the assumption that this is my Amendment. It is not my Amendment.

Mr. Hamilton: When I referred to the Front Bench I meant the Labour Party Front Bench, not the Front Bench below the Gangway, where my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) is sitting.

Mr. Hughes: There is a great difference between the geographical position of the two Front Benches, although ideologically they are united, which is not unusual. I hope that if the Amendment is taken to a Division my hon. Friend will not neglect to vote for the official Opposition Amendment, moved by the Front Bench, because he believes that it belongs to me.
My hon. Friend is prejudiced against the farming community. I take an objective view of it, because I represent a large number of the members of the farming community. I am sorry that the suggestion should have been dragged into the debate that the Price Review and the subsidies to agriculture are not justified in the interests of the national economy. I suspect that there was a hint of this argument in the speech of my hon. Friend the Member for Ebbw Vale (Mr. M. Foot), with whom I usually agree. We must keep it in mind that the structure of the agricultural subsidy system was introduced by a Labour Government. The defence of it is that if we cut away the subsidy there would not be enough money available in the present state of the agricultural economy to maintain the wages of the workers even at the present low level.

Mr. Hamilton: I have never said that I object to farming subsidies as such. My objection is that they are going to the wrong people. Hon. Members opposite


always maintain that public money ought to go only to people who need it most and on the basis of a means test. What I have said in Scottish Grand Committee and what I say now is that I should like to set up a National Assistance Board for farmers with me as chairman.

Mr. Hughes: That is rather too revolutionary for me to swallow immediately. I like to examine these proposals which come from West Fife.
I ask my hon. Friend not to allow what I think is his natural indignation, because some farmers get very large subsidies, to influence him against the structure of the subsidy, which has raised the wages of farm workers in Ayrshire and Fifeshire to the highest level they have ever reached. I do not want him to throw the baby out with the bath water, or to throw out the subsidy scheme because he thinks that farmers are getting away with something.

Dr. Baraett Stross: I am in almost entire disagreement with my hon. Friend the Member for Fife, West (Mr. W. Hamilton). I have not many farmers in my constituency; indeed, there is only one. For that very reason, I can speak as a townsman versus the countryside.
Townsmen today are not as old-fashioned as is my hon. Friend the Member for Fife, West. They remember very well that when times were bad and when agriculture was at a low ebb it was not very good for those who make manufactured goods because agriculture could not afford to buy from us.
As time has passed and we have seen increasing prosperity in the countryside, those who manufacture goods for the agricultural community—pottery or tractors of machinery or clothing or shoes-have found that they inevitably get a share in that prosperity. For reasons of this kind the townsman is neither jealous nor envious of the fact that those who live on agriculture, our farmers, and those who assist, our agricultural labourers, for the first time perhaps since Elizabeth I are getting a fair crack of the whip.
For reasons such as this, I support the Amendment. I think that my hon. Friend had his tongue in his cheek a little when he was speaking, although I find his desire that he should be chair-

man of an Assistance Board which would help the farming industry somewhat attractive. I am sure that if he were in that position he would carry out his responsibilities as gravely and as judicially as anyone else in the country. I am all for this Amendment, and I hope that it will be carried.

Mr. Barber: I think the Committee agrees that this has been a revealing debate, but I do not wish to cause embarrassment and I will pursue that no further.
The hon. Member for Fife, West (Mr. W. Hamilton) asked about the definition of "farmers' goods vehicles" referred to in the Amendment. The definition is in the Vehicles (Excise) Act, 1949 and is:
'farmer's goods vehicle' means a goods vehicle registered under this Act in the name of a person engaged in agriculture and used on public roads solely by him for the purpose of the conveyance of the produce of, or of articles required for the purposes of, the agricultural land which he occupies, and for no other purpose".
The hon. Member for South Ayrshire (Mr. Emrys Hughes) gave the example of an agricultural tractor, but I do not think that that will be covered by the Amendment. It is dealt with separately in the Schedule. Subject to further inquiry, I do not think that a potato lifter would be within that definition. Neither of the instances which he gave is within the ambit of the Amendment.

Mr. Emrys Hughes: What is the position of a lorry which is taking to market or to the salesman the potatoes which have been lifted by the potato lifter?

Mr. Barber: That is most certainly within the ambit of the Amendment.

Mr. Hughes: That is the vehicle which I had in mind.

Mr. Barber: I am sorry. I thought that the hon. Member was referring to the potato lifter. The lorry carrying the produce to market would be within the ambit of this Amendment.
The hon. Member for Ebbw Vale (Mr. M. Foot) asked whether it would be possible for me to give the Committee the specific amounts which would be taken into account at the next Annual Price Review. I am afraid that I cannot do that. Indeed, if he considers the way in which the Price


Review has operated ever since its introduction he will realise that it is impossible for me to say more at this stage than that this being one of the costs of production together with all the others it will be taken into account in the fixing of that Review. It would be quite impossible for me to go any further than that.

Mr. Jay: The hon. Member for Barry (Mr. Gower), when coming to the rescue of the Economic Secretary, assured us that all but a tiny fraction of this tax would be recouped under the Price Review. In those circumstances, could not the Minister assure us that at least 50 per cent. will be recouped—which would be much more moderate than what his hon. Friend suggested?

Mr. Barber: No. I cannot go further than I have. We talked at great length on much the same point in reference to the increase in heavy oil duty, and the right hon. Member will remember that on that occasion it was not possible for us to go any further. I do not wish to delay the Committee by taking up more time on that point.

Mr. Ross: Does the Minister agree that the help given under the Price Review does not fall equally among all farmers?

Mr. Barber: That is certainly so, but it is the only practicable way of giving help. I am sure that the hon. Member will agree with that.
I now turn to the question of horticulture, which was raised by some of my hon. Friends. It is true that horticulture does not come within the purview of the Price Review. But these increases—certainly in respect of those engaged in the industry in a small way—will be very small indeed, because of the concessionary rates which will still apply to those who use farmers' goods vehicles within the definition that I have mentioned.
I can give two examples to illustrate the position. A 1-ton lorry previously paid a vehicle excise licence duty of £11, and it will now pay a duty of £13 10s.—an increase of 50s. A 2-ton lorry previously paid a duty of £13, and it will now pay £15 15s.—an increase of 55s. That is some indication of the increase involved. My hon. Friend the Member for Barry made a valid point in saying

that these increases will be very small. I therefore hope that the Committee will come to a decision on this point. I regret that I cannot give any undertaking that this matter will be considered further at a later stage.

Sir D. Glover: Why should these matters be taken into account in connection with the Price Review for agriculturists when horticulturists get no relief?

Mr. Barber: Because all the costs of production of a farmer are taken into account in the Review whereas, as my hon. Friend knows, the Review does not apply to the horticulturist. But the increased cost resulting from the minor increases in licence duty will be taken into account just as any other change in the cost of production is taken into account.

5.45 p.m.

Mr. Mitchison: I do not think that I have ever heard a Government put up a more feeble defence on what is rather a minor Amendment. All we are asking for is that the increases in vehicle licence duties should not be applied to farmers' goods vehicles. That is the only question. The first defence put forward was that the farmers have always had specially favourable treatment. What connection that has with the increase I entirely fail to see. The question is whether the rates they pay ought or ought not to be increased at the moment. In any case, that answer is not strictly true, because if we take the smallest type of vehicle which is in great use by horticulturists it will be discovered that the rates, if paid on a farmer's goods vehicle, were £10 under the old dispensation and will be £12 under what is now proposed. Those were exactly the rates for other goods vehicles, which is the general category both in the Schedule to the 1949 Act and in the Bill. In that case, at any rate, there has been no special preferential treatment.
I agree that there has been in the case of the larger vehicles, although the Minister made it appear considerably larger than it is. I will not weary the Committee by going into all the comparisons between the former and the present Schedule.
The Minister said that it was only a small increase. We also had the Barry


calculus, which indicated that it was all right, and that all the farmer would have to pay would be a tiny proportion of a very small increase. That cannot be the case. I had the most engaging mental picture of the Price Review floating before my eyes. I saw the farmers, and also the representatives of the Ministry of Agriculture—the Economic Secretary and the Financial Secretary—hand-in-hand. They were saying to the farmers, "Our right hon. and learned Friend put a tax on heavy oil. That will have to be taken into account." The sheet got whiter and whiter, and they added, "Our right hon. and learned Friend also increased vehicle licence duties for farmers. That will have to be taken into account." I wonder what happens when the hard-boiled gentlemen who represent the Ministry of Agriculture and the National Farmers' Union come down to the actual figures. Do they take into account an increase of this character when they are trying to settle the price of barley or oats? I do not believe it is possible. That would be a minimal factor.
The answer about the Price Review question is quite simple. The prices promised under the Review are a combination of two things. First, there is an element of subsidy, which is ultimately paid by the Treasury, and in that respect what the Chancellor is doing is to give with one hand and take away with the other—and being the Chancellor he makes sure that he does the taking away first and the giving afterwards, thereby obtaining an interest-free loan from the farmer in the interval. I cannot imagine anything more foolish in a case of this kind.
As my hon. Friend the Member for Kilmarnock (Mr. Ross) pointed out, it is quite unfair. The result is that a farmer who, because of the character of the ground he is farming, uses a considerable number of tractors to produce the barley or oats for which he gets paid,

will suffer more from this tax, and will not get the difference back in the Price Review. This tax on agricultural vehicles will fall differently in different places and in respect of different farmers. That element is not taken into account.

Secondly, the greater part of the price agreed at the Price Review is paid by the consumers. Here I turn to my hon. Friends, including my hon. Friend the Member for Fife, West (Mr. Hamilton). Neither he nor I wants the prices charged for food to consumers to be raised unnecessarily.

If the result of refusing this Amendment is to be higher prices at the Price Review and the greater part of those higher prices to be paid by consumers, all the hon. Gentleman is doing is to perform the old, old Tory trick of taking away something and then claiming great credit for giving back part of it afterwards, because the rest of it will be charged to the consumer. In the interests of cheaper food, both for people in the country and for people in the town, we put down this Amendment to ensure that subsidies and prices should not be unduly and unnecessarily increased, even by a small amount at this moment.

When we did so we had, of course, well in mind that it was not a large amount. This is the taxpayer fork on which Chancellor after Chancellor is caught in every Budget debate. He says the amount involved is very small. Why not concede it? That is the answer, and that is the answer in this case. In the interests of the consumer and of prices and to prevent the Government taxing in the first place in order to give back part afterwards in an unfair and ridiculous fashion, we propose to test the opinion of the Committee in the Division Lobbies.

Question put, That the words proposed to be left out stand part of the Schedule:—

The Committee divided: Ayes 199, Noes 125.

Division No. 182.]
AYES
[5.51 p.m.


Agnew, Sir Peter
Bell, Ronald
Bourne-Arton, A.


Aitken, W. T.
Bennett, Dr, Reginald (Gos &amp; Fhm)
Boyd-Carpenter, Rt. Hon. John


Allason, James
Berkeley, Humphry
Boyle, Sir Edward


Arbuthnot, John
Biggs-Davison, John
Braine, Bernard


Ashton, Sir Hubert
Bingham, R. M.
Brewis, John


Atkins, Humphrey
Birch, Rt. Hon. Nigel
Bromley-Davenport, Lt.-Col. Sir Walter


Barber, Anthony
Bishop, F. P.
Brown, Alan (Tottenham)


Barlow, Sir John
Black, Sir Cyril
Browne, Percy (Torrington)


Baxter, Sir Beverley (Southgate)
Bossom, Clive
Buck, Antony




Bullard, Denys
Harrison, Brian (Maldon)
Price, David (Eastleigh)


Bullus, Wing Commander Eric
Harrison, Col. J. H. (Eye)
Pym, Francis


Burden, F. A.
Harvey, Sir Arthur Vere (Macclesf'd)
Quennell, Miss J. M.


Butler, Rt. Hn. R. A. (SaffronWalden)
Hastings, Stephen
Ramsden, James


Campbell, Sir David (Belfast, S.)
Heald, Rt. Hon. Sir Lionel
Rawlinson, Peter


Carr, Compton (Barons Court)
Hiley, Joseph
Redmayne, Rt. Hon. Martin


Channon, H. P. G.
Hill, J. E. B. (S. Norfolk)
Rees, Hugh


Chataway Christopher
Hocking, Philip N.
Renton, David


Chichester-Clark, R.
Holland, Philip
Ridley, Hon. Nicholas


Clark, William (Nottingham, S.)
Hollingworth, John
Roberts, Sir Peter (Heeley)


Cole, Norman
Hopkins, Alan
Robertson, Sir David


Collar, Richard
Hornby, R. P.
Robson Brown, Sir William


Cooke, Robert
Hornsby-Smith, Rt. Hon. Patricia
Roots, William


Cooper-Key, Sir Neill
Hughes-Young, Michael
Seymour, Leslie


Cordeaux, Lt-Col. J. K.
Iremonger, T, L.
Sharples, Richard


Corfield. F. V.
Jackson, John
Shepherd, William


Costain, A. P.
James, David
Skeet, T. H. H.


Coulson, J. M.
Jenkins, Robert (Dulwich)
Smith, Dudley (Br'ntf'rd &amp; Chiswick)


Craddock, Sir Beresford
Johnson Smith, Geoffrey
Smithers, Peter


Critchley, Julian
Kerans, Cdr. J. S.
Smyth, Brig. Sir John (Norwood)


Crosthwaite-Eyre, Col. O. E.
Kitson, Timothy
Spearman, Sir Alexander


Cunningham, Knox
Lambton, Viscount
Speir, Rupert


Curran, Charles
Leburn, Gilmour
Stevens, Geoffrey


Dalkeith, Earl of
Legge-Bourke, Sir Harry
Stoddart-Scott, Col. Sir Malcolm


d'Avigdor-Coldsmid, Sir Henry
Lindsay, Martin
Studholme, Sir Henry


Deedes, W. F.
Linstead, Sir Hugh
Talbot, John E.


de Ferranti, Basll
Litchfield, Capt. John
Tapsell, Peter


Digby, Simon Wingfield
Lloyd, Rt. Hon. Selwyn (Wirral)
Teeling, William


Doughty, Charles
Longden, Gilbert
Temple, John M.


Drayson, G. B.
Loveys, Walter H.
Thomas, Leslie (Canterbury)


du Cann, Edward
Low, Rt. Hon. Sir Toby
Thompson, Kenneth (Walton)


Duncan, Sir James
Lucas, Sir Jocelyn
Thompson, Richard (Croydon, S.)


Duthie, Sir William
McAdden, Stephen
Turner, Colin


Elliot, Capt. Walter (Carshalton)
McLaren, Martin
van Straubenzee, W. R.


Elliott, R.W. (Nwcstle-upon-Tyne, N.)
Macmillan, Rt. Hn. Harold (Bromley)
Vaughan- Morgan, Sir John


Emmet, Hon. Mrs. Evelyn
Macmillan, Maurice (Halifax)
Vickers, Miss Joan


Errington, Sir Eric
Maddan, Martin
Vosper, Rt. Hon. Dennis


Farr, John
Markham, Major Sir Frank
Wakefield, Edward (Derbyshire, W.)


Finlay, Graeme
Marlowe, Anthony
Walder, David


Fisher, Nigel
Marten, Neil
Walker, Peter


Fletcher-Cooke, Charles
Matthews, Gordon (Meriden)
Wall, Patrick


Fraser, Hn. Hugh (Stafford &amp; Stone)
Mawby, Ray
Ward, Dame Irene


Gammans, Lady
Maxwell-Hyslop, R. J.
Watkinson, Rt. Hon. Harold


Gardner, Edward
Montgomery, Fergus
Webster, David


Glover, Sir Douglas
More, Jasper (Ludlow)
Wells, John (Maidstone)


Glyn, Dr. Alan (Clapham)
Morrison, John
Whitelaw, William


Glyn, Sir Richard (Dorset, N.)
Mott-Radclyffe, Sir Charles
Williams, Dudley (Exeter)


Goodhew, Victor
Nicholson, Sir Godfrey
Williams, Paul (Sunderland, S.)


Gough, Frederick
Nugent, Sir Richard
Wills, Sir Gerald (Bridgwater)


Gower, Raymond
Oakshott, Sir- Hendrie
Wilson, Geoffrey (Truro)


Grant, Rt. Hon. William
Osborn, John (Hallam)
Wise, A. R.


Grant-Ferris, Wg Cmdr. R.
Page, John (Harrow, West)
Wolrige-Gordon, Patrick


Green, Alan
Page, Graham (Crosby)
Woodnutt, Mark


Gresham Cooke, R.
Pannell, Norman (Kirkdale)
Worsley, Marcus


Grimston, Sir Robert
Pearson, Frank (Clitheroe)
Yates, William (The Wrekin)


Gurden, Harold
Percival, Ian



Hamilton, Michael (Wellingborough)
Pike, Miss Mervyn
TELLERS FOR THE AYES:


Harris, Frederic (Croydon, N.W.)
Pitman, I. J.
Mr. Noble and Mr. G. Campbell.


Harris, Reader (Heston)
Pitt. Miss Edith





NOES


Ainsley, William
Diamond, John
Houghton, Douglas


Allaun, Frank (Salford, E.)
Dodds, Norman
Hughes, Emrys (S. Ayrshire)


Allen, Scholefield (Crewe)
Driberg, Tom
Hughes, Hector (Aberdeen, N.)


Benson, Sir George
Dugdale, Rt. Hon. John
Hunter, A. E.


Blyton, William
Ede, Rt. Hon. C
Hynd, H. (Accrington)


Bowden, Herbert W. (Leics, S.W.)
Edwards, Robert (Bilston)
Janner, Sir Barnett


Bowen, Roderic (Cardigan)
Edwards, Walter (Stepney)
Jay, Rt. Hon. Douglas


Boyden, James
Evans, Albert
Jeger, George


Brockway, A. Fenner
Fitch, Alan
Johnson, Carol (Lewisham, S.)


Brown, Rt. Hon. George (Belper)
Foot, Dingle (Ipswich)
Jones, Rt. Hn. A. Creech (Wakefield)


Butler, Herbert (Hackney, C.)
Foot, Michael (Ebbw Vale)
Jones, Dan (Burnley)


Castle, Mrs. Barbara
Fraser, Thomas (Hamilton)
Jones, Elwyn (West Ham, S.)


Chapman, Donald
Galpern, Sir Myer
Kenyon, Clifford


Chetwynd, George
Ginsburg, David
Key, Rt. Hon. C. W.


Corbet, Mrs. Freda
Griffiths, David (Rother Valley)
Lee, Frederick (Newton)


Craddock, George (Bradford, S.)
Griffiths, Rt. Hon. James (Llanelly)
Lever, L. M. (Ardwick)


Cronin, John
Grimond, J.
Mabon, Dr. J. Dickson


Crosland, Anthony
Hall, Rt. Hn. Glenvil (Colne Valley)
MacColl, James


Cullen, Mrs. Alice
Hamilton, William (West Fife)
McInnes, James


Darling, George
Hannan, William
McKay, John (Wallsend)


Davies, S. O. (Merthyr)
Hayman, F. H.
McLeavy, Frank


Deer, George
Herbison, Miss Margaret
MacPherson, Malcolm (Stirling)


de Freitas, Geoffrey
Holman, Percy
Mallalieu, E. L. (Brigg)







Manuel, A. C.
Rankin, John
Thomson, G. M. (Dundee, E.)


Marquand, Rt. Hon. H. A.
Reid, William
Thornton, Ernest


Mellish, R. J.
Roberts, Albert (Normanton)
Thorpe, Jeremy


Mitchison, G. R.
Roberts, Goronwy (Caernarvon)
Tomney, Frank


Morris, John
Robertson, John (Paisley)
Ungoed-Thomas, Sir Lynn


Moyle, Arthur
Ross, William
Wade, Donald


Oliver, G. H.
Silverman, Sydney (Nelson)
Wainwright, Edwin


Oram, A. E.
Skeffington, Arthur
Warbey, William


Owen, Will
Slater, Mrs. Harriet (Stoke, N.)
Weitzman, David


Paget, R. T.
Slater, Joseph (Sedgefield)
Wells, Percy (Faversham)


Pannell, Charles (Leeds, W.)
Small, William
White, Mrs. Eirene


Parker, John
Smith, Ellis (Stoke, S.)
Wilkins, W. A.


Peart, Frederick
Soskice, Rt. Hon. Sir Frank
Willey, Frederick


Plummer, Sir Leslie
Stonehouse, John
Willis, E. G. (Edinburgh, E.)


Prentice, R. E.
Stones, William
Wilson, Rt. Hon. Harold (Huyton)


Price, J. T. (Westhoughton)
Strachey, Rt. Hon. John
Woof, Robert


Probert, Arthur
Strauss, Rt. Hn. G. R. (Vauxhall)



Proctor, W. T.
Stross, Dr. Barnett (Stoke-on-Trent, C.)
TELLERS FOR THE NOES:


Purgey, Cmdr. Harry
Symonds, J. B.
Mr. J. Taylor and Mr. Lawson.


Randalt, Harry
Thompson, Dr. Alan (Dunfermline)

6.0 p.m.

Mr. H. Wilson: I beg to move, in page 32, to leave out lines 39 to 43 and to insert:

4.
Showmen's goods vehicles
…
—
12cwt.
11
0
0

—



12 cwt.
16 cwt.
12
2
6

—



16 cwt.
1ton
13
5
0

—



1 ton
1¼ tons
13
15
0

—



1¼ tons
—
13
15
0
1
2
6

The Deputy-Chairman (Major Sir William Anstruther-Gray): I think that it would be convenient to discuss with this Amendment the Amendment to page 35, line 11, to leave out "12" and to insert"11".

Mr. Wilson: I think that it would be for the convenience of the Committee to dispose of these two Amendments together, Sir William. We do not want to protract the proceedings unnecessarily, but, having voted against Clause 5 standing part of the Bill, it is important to subject the Schedule to some degree of scrutiny.
I think that it is the more convenient to take the Amendment together because, although we have tabled this Amendment, we feel more strongly about local authority vehicles, which are covered by the next two Amendments. When it comes to a Division, we hope, Sir William that you will show some flexibility, if that is not an impertinent expression of hope. We shall probably feel more strongly about the local authority items than about this one.
These figures go only half-way to making good the Chancellor's increase in tax. Our other Amendments seek to restore the tax position of the vehicles in question to the position they held before the Budget. In this item we have thought it right to put it down about half-way.
I am sure that the Committee may want to know more about this, because there may be some doubt in the minds of hon. Gentlemen opposite as to what is, and what is not, covered by showmen's goods vehicles. It was thought originally that it might apply to the Prime Minister's car, but, although I do not dispute the ingenuity of my hon. and learned Friend the Member for Kettering (Mr. Mitchison), to whom we are once again obliged for the draft, it has not been possible to include that form of transportation. Others thought that as it did not apply to all the Prime Minister's cars, perhaps it applied to the mauve one in which he went round during the General Election, or perhaps the open vehicle in which he took President Eisenhower around immediately before the election. I would regard myself as out of order if I referred to the Prime Minister's car in any detail, because, unfortunately, all that we can get into order are showmen's goods vehicles. The Amendment, therefore, does not include even the bicycle of the Minister of Transport.
If we had had a brief from the Showmen's Guild, which, for some reason, does not seem to have arrived—I do not know whether hon. Gentlemen opposite have received one; it has not been received by hon. Members on this side—we might have been able to cover


more. I am speaking as an amateur in this respect; one who admires some of the showmen on the Front Bench opposite, and I speak, as will be seen, completely unbriefed and unversed.
All I know about showmen's goods vehicles is that between fairs they tend to clutter up the highway. If one tries to pass them, they seem to get bigger and bigger, and longer and longer. They are obviously essential, because if they were not there cluttering up the highway it would not be possible to move fairs from where they are one week to another place the following week. Although it is probably extremely rare for hon. Gentlemen opposite to go to these fairs, I assure them that many of my hon. Friends have derived great benefit at various times from attending fairs of this kind. These fairs are becoming modernised and have "Dodgems" and that sort of thing. These have to be transported about the country and for that purpose vehicles are needed. These vehicles tend to be inordinately

5.
Local authorities' watering vehicles which are electrically propelled.
—
1¼ tons
6
0
0

—



1¼ tons
2 tons
6
0
0
2
6
8


2 tons
3 tons
13
0
0

15
0


3 tons
4 tons
16
0
0

16
0


4 tons
5 tons
19
4
0

12
0


5 tons
—
24
0
0

—

At present, we are discussing the two Amendments to which I referred earlier.

Mr. Wilson: I agree that what you say, Sir William, corresponds with a notice which appeared in one of the corridors this morning, but I thought that representations had been made to you, in the interests of speed, that, as there Amendments raise similar points, we should debate with these Amendments the Amendments dealing with local authority watering vehicles which are electrically

6.
Local authorities' watering vehicles which are not electrically propelled.
—
12 cwt.
10
0
0

—



12 cwt.
16 cwt.
12
10
0

—



16 cwt.
1 ton
15
0
0

—



1 ton
2 tons
15
0
0
2
10
0


2 tons
2½ tons
25
0
0
1
10
0


2½ tons
3 tons
28
0
0
2
0
0


3 tons
4 tons
32
0
0
1
12
0


4 tons
5 tons
38
0
0
1
4
0


5 tons
—
48
0
0

—

and the Amendment to page 33, line 13, to leave out "7 0 0" and to insert, "6 0 0". It is for the Committee to decide whether that is convenient.

long, and they attract the rate of tax set out in the Bill, which we seek to amend to a slightly lower figure.

I gather that the Economic Secretary will reply to the debate. If he can satisfy us about the social justice and economic relevance of this increased impost on showmen's goods vehicles, I would be prepared to offer a fifty-fifty chance that we would not test this in the Division Lobby. It is, therefore, up to the hon. Gentleman to excel himself in the case he puts before the Committee on this question of showmen's goods vehicles, because I feel that he, at any rate, will have had a brief.

The other two classes of vehicles are covered by the guidance you have given to the Committee, Sir William.

The Deputy-Chairman: I think that perhaps I should help the Committee. It was intended to discuss with this Amendment the Amendment to page 33, line 11. There will be a separate debate on the Amendment to page 32, to leave out lines 44 to 48 and insert:

propelled, and local authority watering vehicles which are not electrically propelled.

The Deputy-Chairman: We can discuss whatever is convenient to the Committee. I see nothing against discussing the two Amendments at present under discussion at the same time as the third Amendment to page 32, the Amendment to page 32, to leave out lines 49 to 55 and to insert:

Mr. Barber: I am in the hands of the Committee. I would have thought that it would have been preferable to consider showmen's goods vehicles separately


from local authority watering vehicles, because different considerations apply. For example, I think that one of the right hon. Gentleman's hon. Friends referred to the general grant and said that he wished to have an answer with regard to local authority watering vehicles. However, as I said, I am in the hands of the Committee.

The Deputy-Chairman: That being so, I think that we had better stick to the original idea, particularly as the order for taking the Amendments was exhibited in the Lobby.

Mr. Wilson: No one is happier than we are at the outcome of this consultation. We were only trying to help the Chancellor get his Bill through more quickly, but if the Government Front Bench want to deal with it otherwise, so be it. It is such a shocking Bill that it fills us with nausea when we look at it. We therefore wanted to get rid of it as quickly as possible. As I have a feeling that the speeches of the Economic Secretary on these Amendments will become tediously familiar before we dispose of them, I thought that it would be for the benefit of the Committee to roll all his speeches into one. However, we understand his difficulty. He has read the brief on showmen's goods vehicles, and not the brief on the following Amendments. We will, therefore, give him more time during the debate to catch up with his other brief.
In view of what you have said, Sir William, I must withhold from the Committee any powerful observations which might have occurred to me, or which I was hoping would occur to me, about local authority watering vehicles which are electrically propelled and those which are not electrically propelled, and deal with showmen's goods vehicles.
I have indicated to the hon. Gentleman, who is obviously bursting to speak on this Amendment, what he should do. He has a powerful speech prepared. We must not delay his speech by reference to watering vehicles. He is bursting to get at us, and after a number of my hon. Friends have joined in the debate I am sure that we shall be delighted to hear what he has to say. I have given him the maximum possible incentive to indulge in brilliant rhetorical persuasion

by saying that perhaps we will not vote against him if he makes a good case.

Mr. Gower: In a most amusing and entertaining way, the right hon. Member for Huyton (Mr. H. Wilson) has spoken effectively against his own Amendment. It proposes a reduction in the proposed duty which, in most cases, would be very small proportionately, about £1 per annum on such a vehicle. The right hon. Gentleman went on to say that despite the harsh impact of this impost, these vehicles are getting bigger and bigger and inordinately long. So, apparently, the existing impost is no disincentive to their increasing in size.
This is a legitimate business expense for showmen and, therefore, the effect of the duty, and certainly the effect of this marginal increase in it, will be insignificant.

Mr. H. Wilson: I am sure that the hon. Member would not want to misunderstand my argument. I welcome the fact that he seems already half converted to what I was arguing earlier, that taxation of road vehicles should bear some relation to their length and size and should not be a flat-rate tax. The hon. Member says that these are very large vehicles and the tax very small. He is obviously coming round to the view which I expressed concerning the taxation of private cars.
It would be out of order to pursue the point further, but the hon. Member is now making the point that this is a legitimate business expense that the Chancellor will allow for deduction against Income Tax and Profits Tax in so far as these showmen are assessed for those taxes. Is that the point the hon. Member is making?

Mr. Gower: I was not making the point that the Chancellor of the Exchequer would allow it. I merely stated that it was a legitimate business expense for which any showman would be able properly to claim and to set against his profits. To that extent his Profits Tax would thereby be reduced.

Dr. Stross: The hon. Member is speaking about profits and saying that it would be possible for a showman to ensure that he gets back this increase in tax. Suppose, however, that it is a non-profit-making organisation. Has not the


hon. Member given thought to the fact that showmen who are non-profit-making—operatic companies, and so on—have to use vehicles of this type to take their furniture with them when going from town to town? They might well be included. If so, how does the hon. Member's argument apply?

Mr. Gower: I am doubtful whether they would fall within that category, because operatic societies are not properly described as showmen. The hon. Member gave them their proper description. They are operatic societies using the vehicles to convey apparatus and costumes which they use. They are not showmen in the sense in which that word is usually understood. Not by any remote extension of the word could it include an operatic society.

Mrs. Slater: Would not the hon. Member agree that the Theatre in the Round and Century Theatre have to take their props around with them and that they are part of their organisation? Would they not be included?

Mr. Gower: If the hon. Lady refers to the definition of "showmen" in any standard dictionary, she will find that it applies to something of a particular description.

Mr. H. Wilson: Perhaps I may help the Committee by reminding hon. Members what a showman's goods vehicle is. It is defined—I am sorry to cut out half the brief of the hon. Member for Barry (Mr. Gower)—in the Vehicles (Excise) Act, 1949. which states that
'showman's goods vehicle' means a showman's vehicle which is a goods vehicle and is permanently fitted with a living van"—
whatever that might be—
or some other special type of body or superstructure, forming part of the equipment of the show of the person in whose name the vehicle is registered under this Act".
It specifically distinguishes between a showman's goods vehicle and a showman's trailer, because the latter means
a trailer drawn by a showman's goods vehicle and used solely for the purposes of his business by the person in whose name the vehicle is registered under this Act".
This must be further distinguished from a showman's vehicle which, in contradistinction to a showman's goods vehicle or a showman's trailer, means

a vehicle registered under this Act in the name of a person following the business of a travelling snowman and used solely by him for the purposes of his business and for no other purpose".
In other words, when we tabled the Amendment in terms of showmen's goods vehicles, we substantially narrowed the scope of the debate. I apologise for that. Obviously, under the definition of "showman's vehicle", we could have included the Prime Minister's car.

6.15 p.m.

Mr. Gower: What the right hon. Gentleman has said underlines my suggestion that operatic companies would not be included. I do not think that the hon. Lady the Member for Stoke-on-Trent, North (Mrs. Slater) has ever seen a vehicle of such a society, used for pulling around its property, with living accommodation behind.

Mrs. Slater: Yes. I have.

Mr. Gower: I revert to my suggestion that this would be a legitimate business expense for the kind of showman described in the Amendment and that as such it would be a trivial matter in his annual training. To that extent, I cannot feel that the Amendment is a serious one. I cannot believe that this is a case of tremendous importance, or that it has particular merits over and above the case of other vehicles. There are many vehicles which have greater merit, and I hope that the Committee will reject the Amendment.

Mr. M. Foot: The hon. Member for Barry (Mr. Gower) seems to be playing a curious rôle in these debates. Every time that the Opposition put down an Amendment to a Clause, the hon. Member says either that the new impost levied by the Government can be passed on, so that it will not matter at all, or that it is such a small amount that nobody need take any account of it. Every time he says that, the hon. Member does not seem to realise that he is emphasising either how unnecessary it was for the Government to have made their original imposition or that the situation can be simply remedied by adopting what has been proposed from this side of the Committee.
If the hon. Member is to continue this rôle throughout the proceedings, what he has said may penetrate eventually


to the Government Front Bench. The hon. Member has done it with great irony and subtlety. In effect, he has said that what the Government are proposing is superfluous and that the simplest way to remedy the situation is that the Opposition's proposals should be adopted.
I rarely differ from my right hon. Friend the Member for Huyton (Mr. H. Wilson) even by a hair's breadth on economic matters, but it seemed to me that he showed at least a certain element of flippancy in moving the Amendment. It may be that the reason he did so was that his mind was clouded, which it rarely is, on this occasion partly by the particular category of showmen whom he had in mind. That is rather hard on the other showmen, because the Amendment is designed to deal with full-time professional showmen.
My right hon. Friend should not be muddled with questions about what might be the position of the amateur showmen whom we know on the Government Front Bench. Therefore, it is proper that the Amendment should be seriously considered, particularly as my right hon. Friend stressed that the case of the genuine showmen is rarely defended in this House. It may be that they do not have a showmen's guild and have not circulated to us the kind of memorandum that we get from other organisations—

Mr. H. Hynd: They have an organisation.

Mr. Foot: I am glad to hear it. Indeed, the fact that the Showmen's Guild has not gone to the lengths of wasting so much paper to bombard us as other organisations do should not be counted against them. The showmen's case should be considered on its merits even though they have not gone to the length of circulating Parliament with their case.
In replying to the Amendment, the Economic Secretary has put himself in difficulty by his case on the previous Amendment, when he said that although the Government are making this new impost, the people who might suffer from it—the farmers—do not need to worry very much because it will all be taken account of in the Price Review. At least, the hon. Member suggested that a great part of it would be taken account of in the Price Review.
The showmen have no annual price review to which they can turn. Therefore, the only defence which the hon. Gentleman offered in respect of the previous Amendment cannot be offered in this case. It is a pity that, in referring to the previous Amendment, the hon. Gentleman did not try to treat it on its merits. He would then have been in a better position to put the argument on this Amendment.
The other argument which the Economic Secretary advanced on the previous Amendment was that the farmers have had the relief for about thirty years and that that was one reason, he thought, why it should be altered now. I am not quite sure what his information about showmen's vehicles is. I hope that he will explain what has been their position during the last thirty years. It would be very hard on showmen if the Economic Secretary were to show less diligence in examining what has happened in their case than he has shown in considering the interests of farmers. Perhaps the showmen have not such a large vested interest in the country, and perhaps they do not carry so many votes, but they have as much right to have their case considered as anyone else has.
I assume that the principal category of showmen involved are those who provide fairs up and down the country. In my view, they render considerable service to the community. I am not quite sure what economic terms one would use to describe it, but I imagine that, if one examined how much of their expenses was involved in their vehicles, one would find that it was probably a higher proportion than could be found in any other section of the community.
In the cost of maintaining the fairs which we see throughout the country, probably the largest portion of all is the amount which has to be paid for vehicles. [An HON. MEMBER: "What about meat for the animals?"] There may be other expenses which are quite heavy and other activities which have expenses in respect of vehicles almost as high as the expenses of showmen. Of course, this is the kind of information which the Economic Secretary will have at his elbow. He will be able to tell us all about it. I shall be very interested if he tells us of any other operation which has to bear such a high proportion of its costs in relation to its


cars and vehicles. Looking at the matter from the commonsense point of view, it seems plain that this tax will fall, relatively, more heavily on showmen than on any other section of the community which has a similar tax inflicted upon it. If I am not right in that, I hope I shall be corrected.
Why should not there be special relief for showmen? As I have already said, farmers have their escape through the Price Review. Everyone knows that the Price Review is very much mixed up with politics. When the Government consider whether they will give farmers relief from the imposts they are imposing under the Budget and when they discuss the Price Review, political interests are not absent from the discussion.
I do not say that the Price Review is determined in direct consultation with the Conservative Central Office, but I am sure that such influences do affect a Tory Government in the amounts which they give under the Price Review. We are not all innocents here. We know that the Price Review for farmers is not left solely in the hands of the Minister of Agriculture, but there have to be consultations with the Leader of the House in all his various capacities before it can all be settled.
For showmen, no such reference to an annual price review is possible. Moreover, the showmen are in particular difficulty in passing on the tax to the public. In regard to the previous impost, it was argued very powerfully that, of course, the extra tax would be likely to be passed on to the consumer. This is not so easy for showmen. If a man charges 6d. for a ride on the "Dodgems", he cannot suddenly start charging 6¼d. for a ride on the "Dodgems". The whole brunt of the tax will have to be borne by the showmen. It is all very rough on them.
I hope that the Economic Secretary will at least be able to show the Committee that, before the Government decided, after all these years, to go ahead and impose this special tax on showmen, they went into all these matters carefully and did not just "cook up" some ideas to offer against the Amendment when it was put down. I hope that he will show that, before taking the action they did, they considered all the

possibilities and all the likely results of what they were doing in relation to this section of the community.
It is often said by Chancellors of the Exchequer, "If we give relief to one section of the community, we shall have to give it to many others as well". Perhaps the Economic Secretary will resort to a defence of that kind. One can always be sure that the Treasury has a very poor defence for something which it does when it says, "If we give this just relief in this case, we shall have to apply justice to others as well". I hope that the Economic Secretary will not resort to that device in this case.
One can hardly think of a section of the community more easily isolated than showmen. [HON. MEMBERS: "What about the Prime Minister?"] When my hon. Friends revert time and time again to the position of the Prime Minister, they blur the issue. There is a difference between the professional showman and the amateur showman.

Mr. H. Wilson: Is my hon. Friend entitled to make these attacks on the professional ability of the Prime Minister without giving the right hon. Gentleman notice?

Mr. Foot: I was not making any attack on the Prime Minister. I was defending the legitimate showmen from the slur cast upon them by my right hon. Friend this afternoon. It is sad that he should have stooped to use this occasion to try to pretend that there is any comparison between those who are engaged in a perfectly legitimate occupation for the gaiety of the nation and those who are engaged in activities which I shall not describe lest I be in difficulties with the Chair. I hope that no more will be heard of the amateur showmen whose names have been introduced to confuse the issue.
I am concerned that the Government should impose an extremely heavy tax on a section of the community which is quite inoffensive. Showmen have not deserved it. They have not landed the Government in their economic difficulties. They are not the sort of people who pay Surtax. They probably do not pay very much taxes at all. They will not receive the reliefs that the Chancellor is giving in his Surtax concessions.


Showmen make an excellent, honourable and traditional contribution to the welfare and gaiety of the nation. Their rights should not be brushed aside, but should be treated seriously and fairly, being given every consideration even by a Government who are determined to stamp out the gaiety of the nation in other ways.
I hope that the Economic Secretary will realise that he could perfectly well accept the Amendment without involving himself in difficulties about watering vehicles or anything of that kind. If he did accept it, showmen in Hampstead Fair and other fairs throughout the country would throw up their hats and say that this Government are at least doing something on their account. I dare say that there would be celebration throughout the country as a result of the Government's generosity.
When I saw the Chancellor of the Exchequer coming in, I thought that he might deal with this Amendment himself. He can still decide to do so. I hope that he will make himself the hero of the fairs throughout the country. He has only to make one generous gesture to them. He is not making any other generous gestures at this time, except, of course, to his particular friends the Surtax payers. He can easily be fair and generous to a section of the community which would not dream of paying Surtax at any time.

6.30 p.m.

Mr. H. Hynd: It is unfortunate that my hon. Friends have introduced the question of political showmen, especially in the absence of the hon. Member for Kidderminster (Mr. Nabarro).
I have become more and more puzzled at the arguments used on these Amendments. On the one hand, we are told that the farmers will be all right because they will be reimbursed in the Annual Price Review. Then the hon. Member for Barry (Mr. Gower) tells us that the showmen will be reimbursed through Income Tax relief. His argument seems to be that what they will lose on the swings they will gain on the roundabouts. That seems to me to be an argument that no tax should be levied at all, because if the Treasury pays the tax in one way or another, why impose it?
This is a special case, because showmen's vehicles are tools of their trade. We have always attempted to give special consideration to what are broadly described as the tools of the trade. Surely the showman's vehicle is a tool of his trade and an essential part of his business, something which he cannot do without. I believe that that is the strongest argument for asking for special consideration in his case. I take pleasure in supporting the Amendment.

Mr. John Diamond: I wish to make one point and to ask one question.
We are all deeply indebted to my right hon. Friend the Member for Huyton (Mr. H. Wilson) for the very well-informed way in which he put forward the Amendment. As a result, we know the definition of showmen's goods vehicles which involve living accommodation. Therefore, I should have thought that the first point which stands out—I am sure that the Government Front Bench will give their attention to it—is that, since it involves living accommodation, it is the last suitable subject for additional taxation. I hope that the Economic Secretary will deal fully with that point.
The question which I wish to ask concerns a matter in which the Economic Secretary and I are interested. I am a director of Sadler's Wells and the hon. Gentleman is a Treasury Minister. Sadler's Wells receives a very large grant from the Treasury, although not directly. It is done through the Arts Council. The reason why it receives a large grant is that it is responsible for the whole of touring opera in the country. A number of my hon. Friends and I are interested to know the extent to which the Amendment might affect Sadler's Wells.
The costs of touring and of carrying heavy equipment for heavy opera are very great. The cost of lodging is also very great. The costs will get greater, because they have recently been the basis, quite properly, of an increase in wages and salaries. I am not certain whether this practice holds good in other similar dramatic and operatic societies, but it might well hold good in future for Sadler's Wells that living accommodation and transport may be combined.
We wish to know, therefore, to what extent this particular statutory definition is interpreted in practice. There is always a statutory definition, but the thing which matters is how it is interpreted by the Inland Revenue and by the Customs and Excise. Does a vehicle which carries equipment of this kind in touring opera and which provides accommodation, but not permanent living accommodation, while it is touring come under this heading and would it not be wrong to increase the tax on it?
I repeat that the Treasury is also interested in this matter. As I say, costs will go up, and although, naturally, Sadler's Wells is not reimbursed for these costs, it wishes to keep them down as much as possible, having regard to the large amount of public money involved. I therefore hope that the Economic Secretary will deal with the two points which I have raised concerning increased taxation on living accommodation and assistance to the Arts.

Mr. Barber: The right hon. Member for Huyton (Mr. H. Wilson) invited me to make a powerful oration on this very important matter and then proceeded to deal in such masterly fashion with the legal technicalities, particularly the definitions, that I do not think hon. Members will expect me to devote so much time to the Amendment as I might have done. With his usual quiet persuasion, the right hon. Gentleman put the case for show people of all types. I was only surprised that he did not declare his interest.
The right hon. Gentleman was correct in saying that the effect of the Amendments is to cut the proposed increase of 20 per cent. in respect of showmen's goods vehicles to about 10 per cent., and to cut the increase in respect of vehicles used for drawing showmen's trailers. The hon. Member for Ebbw Vale (Mr. M. Foot) expressed the hope that in this case, as in the previous case, I would be able to give him some information about the history of this matter. I do not wish to delay the Committee long, but I should point out once again that for nearly thirty years showmen's goods vehicles have enjoyed special rates of

licence duty. They will still enjoy special rates of licence duty under the Bill.
Let me give one or two examples of the way in which it will work. The concession is a substantial one. At one ton, a showman will pay £14 10s. a year as against the general rate of £18 10s.; at three tons, £24 5s. as against £42 generally; and, at five tons, £34 5s. as against £84 generally. These are concessions of 20 per cent., 40 per cent. and 60 per cent. respectively. Concerning the second Amendment, which deals with showmen's goods vehicles drawing a trailer, in all cases this will mean an increase of only £2—from £10 to £12 a year. When compared with the duty paid in respect of ordinary goods vehicles drawing trailers, this is a very real concession. The proposed increase in respect of one-ton showmen's goods vehicle is only £2 10s. a year, for a two-ton vehicle £3 5s. a year and for a three-ton vehicle only £4 5s. a year.
The hon. Member for Gloucester (Mr. Diamond) referred to the question of the definition of a showman's goods vehicle and to the observations of his right hon. Friend the Member for Huyton. I do not think that the hon. Gentleman can have heard exactly what his right hon. Friend said. The right hon. Gentleman pointed out that it was defined as a vehicle
which is a goods vehicle and is permanently fitted with a living van or"—
this is the important point—
some other special type of body or superstructure, forming part of the equipment of the show…
In other words, the definition is not confined to a goods vehicle permanently fitted with a living van but includes a vehicle which is permanently fitted with some other type of body or superstructure.
In answer to the specific point raised by the hon. Member for Gloucester concerning a particular company, I can only say that I am sure that he will appreciate that, without knowing the details of the type of van, it is impossible for me to give him an answer. I stress that, even with these very modest increases in the duty on showmen's goods vehicles, there will remain very substantial concessions


in respect of them and that they will remain in a specially privileged position.
Having explained the reasons for my right hon. and learned Friend's proposals, and in the light of what the right hon. Member for Huyton said at the outset, I hope that on this occasion he

5.
Local authorities' watering vehicles which are electrically propelled.
—
1¼ tons
6
0
0

—



1¼ tons
2 tons
6
0
0
2
6
8


2 tons
3 tons
13
0
0

15
0


3 tons
4 tons
16
0
0

16
0


4 tons
5 tons
19
4
0

12
0


5 tons
—
24
0
0

—

The Temporary Chairman (Mr. W. R. Williams): It may be for the convenience of the Committee if we also take with

6.
Local authorities' watering vehicles which are not electrically propelled.
—
12 cwt.
10
0
0

—



12 cwt.
16 cwt.
12
10
0

—



16 cwt.
1 ton
15
0
0

—



1 ton
2 tons
15
0
0
2
10
0


2 tons
2½ tons
25
0
0
1
10
0


2½ tons
3 tons
28
0
0
2
0
0


3 tons
4 tons
32
0
0
1
12
0


4 tons
5 tons
38
8
0
1
4
0


5 tons
—
48
0
0

—

and the Amendment to page 33, line 13, to leave out "7 0 0" and to insert "6 0 0".

Mr. Wilson: I shall not detain the Committee long on this Amendment, because I think the point is perfectly clear. We are proposing to remove the proposed increases in taxation from local authority watering vehicles and to leave those vehicles, from the tax point of view, exactly where they were before the Budget was introduced. I do not think that I need worry the Committee with detailed figures, but I can assure hon. Members that the figures on the Notice Paper restore the rates already in force under the previous legislation. I do not think, either, that I need take long in making the case for the exemption of watering vehicles from the operation of the Schedule.
Watering vehicles are obviously an essential part of local authority services, whether they are electrically propelled or not. We all know what they are used for. They are defined in the appropriate Act in terms which, in layman's language, mean that they are used for washing streets or washing gulleys and they are obviously essential for public health and hygiene. I cannot understand why the

will not feel it necessary to press his Amendment to a Division.

Amendment negatived.

Mr. H. Wilson: I beg to move, in page 32, to leave out lines 44 to 48 and to insert:

this the Amendment to page 32, to leave out lines 49 to 55 and to insert:

Government think it necessary to put a tax on them. Clearly, this means either an increase on the rates or some tinkering about with the grant. It is bound to fall on the public in one form or another. Local authorities will not cut down their expenditure on watering vehicles because of the tax. They will just increase the cost of local authority services.

If there were a parallel in our Finance Bill debates with this proposal, it would be one which we debated at length on the 1955 autumn Finance Bill, when the then Financial Secretary, now the Economic Secretary, used to wax eloquent at all hours of the night in support of proposals to increase tax on dustbins, another local authority item of essential equipment. We all remember the hon. Gentleman's speeches on that occasion. They did not add anything. We knew perfectly well what had happened. The Chancellor had decided to increase Purchase Tax over a wide range of goods. He had probably not realised that dustbins were included. He took the decision. The Department went to work, and there were dustbins, as large as life, and the Financial Secretary had to defend the tax. I do not suppose for a moment that the present Chancellor knew that he


was taxing local authority watering vehicles when he rose to speak on Budget day, and now a Minister has to be put up to defend it.

Obviously, it is an oversight. If the Financial Secretary will say, "This is one of those things. We are prepared to withdraw it", we will let the matter rest there. If he accepts the Amendment, we do not propose to pursue the matter further, or to be vindictive about it. It is a mistake. All he has to say is, "For the sake of completeness we had to put them in and that is why the tax is there." We have already heard the Economic Secretary argue about the special dispensation given to showmen's vehicles. There is a case for doing this for watering vehicles.

6.45 p.m.

Nobody buys a watering vehicle just for the fun of it. It is not the sort of thing one buys because one is feeling rich and wants to splash one's money about. I do not know any individual, however extravagant, who possesses a watering vehicle. The Financial Secretary is looking excited. I do not know whether he has one. It is the sort of thing a local authority buys to wash the streets. It is absolutely essential and one either has one or does not have one. If an authority has one, it has to pay this increased tax and then recover that tax by putting up the rates. Then the Chancellor will go to the Tory Party conference and bemoan the extravagance of local authorities in public expenditure.

The Vehicles (Excise) Act, 1949, defines a local authority's watering vehicle as,
a goods vehicle used solely within the area of a local authority by that local authority,"—

There is no question of crossing local authority frontiers here—
or by any person acting in pursuance of a contract with that local atuhority, for the purpose of cleansing or watering roads or cleansing gulleys".

It could not have been put more clearly than that. It is an Act of the Labour Government of 1949, and, in passing, I would draw attention to the clarity of the drafting. Everybody knew straight away when I was reading it what it meant. There was no misunderstanding at all, unlike some parts of the present Finance Bill.

I hope that the Financial Secretary will be man enough to say that these

vehicles should never have been included. I hope he will say that it was an accident and a piece of excessive bureaucratic zeal and that he is accepting the Amendment. We can then pass on to the next Amendment with mutual satisfaction.

Mr. Willis: The remarks of my right hon. Friend the Member for Huyton (Mr. H. Wilson) are very important, particularly for the large local authorities. They have to buy a number of these watering vehicles. I do not know whether the Government will tell us once again that this increased tax will be almost offset by an addition to the general grant. We have had that excuse before. It strikes me that we are adding to the burdens of local authorities. As everyone knows, they are already overburdened and we should not unnecessarily increase the demands on the local rates.
There is also the point that it will require some of the large towns, and I think particularly of Glasgow and Edinburgh, to make another contribution to some of the county areas, because these vehicles are mainly used in the large towns. If the tax means increased expenditure for those large local authorities and if a sum in respect of it is added to the general grant, a local authority will find that though it has to meet the increased expenditure it does not necessarily receive the increased grant, because that grant is divided among all the local authorities on the basis of quite a different formula.
Therefore, whilst Glasgow or Edinburgh might pay a considerable amount in extra taxation, Orkney and Shetland, Sutherland and Caithness and other counties would receive the benefit of the increased grant. I have no objection to those counties receiving the increased grant, but there is a limit to their receiving it at the expense of large towns or of densely crowded counties such as Lanark or Midlothian. The increased tax, therefore, seems unfair from that point of view, apart from the serious considerations put forward by my right hon. Friend the Member for Huyton.
As he said, it must have been an oversight to include these among the vehicles to be taxed, and I trust that the Minister will say that the Government have


no intention to proceed with this proposal and that, convinced by the weight of argument against it, they will withdraw it and bring the matter to a close.

Mr. George Jeger: One question which I should like to put to the Minister is to what extent these watering vehicles are used throughout a year. If one casts one's mind back to last summer, one realises that local authorities must have sent their watering vehicles out very rarely, if at all; there was no need to, the water came from elsewhere. Therefore, the watering vehicles were standing in the yards and garages of local authorities and they had already paid a certain amount of tax on them. If the tax is increased on these vehicles, it would seem that local authorities will waste an even larger amount of the ratepayers' money on taxing vehicles which will have very little use.
I wonder whether it has been worked out exactly how much a day it costs each local authority to send out one of these watering vehicles. If it were sent out only three or four days a year, it might be a very expensive operation if the cost of the vehicle, the amount of taxation and the cost of the man who operates it were added together and then divided by the number of days upon which the vehicle was used. It would be a very expensive operation indeed. Yet, local authorities must have these vehicles. They are essential to health and hygiene, to lay the dust and clean the gulleys. The least the Chancellor could do would be to exempt the local authorities from any increase in the taxation which is levied on private vehicles.
During the main Budget debate, the Chancellor was good enough to indicate to the nation that anyone earning less than £5,000 a year was in rather dire straits. The people, other than local authorities, who buy these watering vehicles may well be in receipt of £5,000 a year. They have probably already spent as much as they can on luxuries and then decide that a watering vehicle is something which they had not got and which they should have as a status symbol. I have no objection to private individuals who buy watering vehicles paying a higher tax on them, but I think that local authorities which have to have watering vehicles for the benefit of local

welfare, health and hygiene should have the benefit of a reduction in tax or indeed of no tax at all upon vehicles. I hope, therefore, that the Chancellor will accept the Amendment.

Mr. M. Foot: One matter on which the Minister who is to reply may like to comment is the fact that there seems to be a rather curious selection by the Government of the speakers who are to reply to the various Amendments. The previous Amendment that we were discussing proposed a tax on gaiety and therefore we were confronted with the lean, puritanical figure of the Economic Secretary. We are now discussing a tax on cleanliness and we get the jovial, cavalier figure of the Financial Secretary to deal with it. It seems a curiously appropriate way in which the Government have arranged the matter.
I wish to put one question to the Financial Secretary. It was said when we were discussing the impost on farmers' vehicles that the farmers would be able to recoup a large part of the amount under the Annual Price Review. Will the Minister tell us that local authorities will be able to recoup at any rate a part of the imposition included in this tax from some of the arrangements which are made with the Government, and if not, why not?

Sir E. Boyle: I hope that I am no better or worse than the average hon. Member in taking up points made in Committee, but I could not gather what conclusion I was expected to draw from the point made by the hon. Member for Ebbw Vale (Mr. M. Foot) about cleanliness. May I say to the right hon. Member for Huyton (Mr. H. Wilson) that I think that it was the present Minister of Housing and Local Government who replied to the debate about dustbins in 1955, but I feel that the debate this afternoon was a very happy echo of those debates.
Since 1933 there have been special rates of licence duty for the types of vehicles we are discussing in this Amendment. That was the year of the very important Local Government Act, which was really the charter of local government until the Act of two or three years ago.
My right hon. and learned Friend does not think that it would be right to exempt local authority watering vehicles


altogether from the increase that has been made in the motor duty. But I can tell the Committee—and I am not sure whether this is appreciated by all hon. Members—that the extra duty that will be payable in respect of local authority watering vehicles as a result of this Clause will be rather small.
If one takes an electrical vehicle of 1 ton, before the Budget the tax paid on it was £6 and after the Budget it will be £7. For 2-ton vehicles it was £13 before the Budget and £16 after the Budget. For non-electrical vehicles of 1 ton it was £15 before the Budget and £18 after the Budget. For non-electrical vehicles of 2 tons it was £25 before the Budget and £30 after the Budget. For trailers, both for 1 ton and 2 ton vehicles, the payment was £6 extra before the Budget and £7 extra after the Budget. So, while I entirely recognise the burden of any increase, which is something which we should certainly bear in mind, in the taxation of local authorities, I do not think that any hon. Member on either side of the Committee could dispute that these vehicles are still receiving fairly strong preferential treatment.
Speaking as one who, when at the Ministry of Education, was responsible for laying heavy extra burdens on local authorities—because whether one had a percentage or general grant system local authorities had to pay between 40 per cent. and 50 per cent. of the extra cost of education—I do not think that the figures I have given represent a great extra burden on local authorities.

7.0 p.m.

Mr. H. Wilson: Mr. H. Wilson rose—

Sir E. Boyle: May I, first, answer the question put by the hon. Member for Ebbw Vale (Mr. M. Foot)? The answer is that local authority expenditure on watering vehicles is not relevant expenditure for the purposes of the general grant. The reason is simply that cleansing is not one of the relevant services covered by the general grant. But, of course, this expenditure may have a marginal effect on the amount of the rate deficiency grant which is, in effect, a percentage grant to certain poorer local authorities on the whole of their net expenditure. The answer to the hon. Gentleman is that this will not be relevant expenditure for the general grant, but it could have that

effect on rate deficiency grants where these grants are paid.

Mr. Wilson: The hon. Gentleman has given figures about various types and sizes of watering vehicles, the rates paid on them before the Budget and the rates which will be paid as a result of this Schedule. He was trying to say that the increases were not great. But will the hon. Gentleman look at his own figures? Is not it a fact that the figures he has given in respect of all vehicles of more than 1 ton, at any rate from the 2-ton level upwards, bear a greater increase even than the increase for private cars?
I think that I heard the hon. Gentleman say that for a 2-ton vehicle the payment, which was previously £13, was now £16. which is an increase of £3. That is greater than the proportionate increase for private cars. The same would be true regarding really heavy vehicles, where there is an increase from £20 to £25, and figures of that kind. I think that the hon. Gentleman will agree that the proportion is greater than for private cars. If so, how can he argue that these are small increases?

Sir E. Boyle: In percentage terms, as the right hon. Gentleman will know, there is an element of rounding-off in these proposals. I can give him the percentage figures. For electric vehicles of 1 ton or 2 tons, for all weights, the percentage increase will be between 16½ per cent. and 25 per cent. For the non-electric vehicles it will be between 18·7 per cent. and 21½ per cent. None the less, I thought it reasonable to give the Committee the exact figures, because I do not believe that these proposals will impose an unreasonable burden on local authorities.
For the reasons that I have given, my right hon. and learned Friend does not think that it would be right to exempt these vehicles from the increases made in the Budget. I believe that these vehicles still receive pretty concessional treatment. I do not consider that the proposals we are making are unreasonable from the point of view of local authorities doing this service, and so I invite the Committee to reject the Amendment.

Mr. Elwyn Jones: Can the hon. Gentleman explain on


what principle the local authority watering vehicles which are not electrically propelled apparently bear a duty almost twice as high as the duty on those water-ing vehicles which are electrically propelled? What is the esoteric basis for this fascinating distinction?

Sir E. Boyle: If the hon. and learned Gentleman will look at my figures tomorrow, he will find that in percentage terms there is not as big a difference as he makes out.

Mr. E. C. Redhead: I have listened with growing astonishment to a succession of Government spokesmen who have been talking about the increases in various categories of vehicles. I am becoming increasingly amazed at the tendency to dismiss every item as being a purely modest tax increase which, therefore, does not matter very much. If that be the argument, I suggest that correspondingly it ought to be argued whether it is worth while occasioning the degree of irritation that tax increases of this character produce.
It is true that the classical argument every time a tax is increased is that it is only a little increase. But that argument is plausible only so long as we look at a particular increase in isolation. When dealing with local government vehicles in this category it is fair to point out that this is one further burden to add to the many burdens which this Government have placed on local authorities. For that reason it is an increasing cause of irritation.
In his Budget statement the Chancellor of the Exchequer, referring to the general increases over the whole range of these vehicle licence duties, concluded with the postscript:

"…these increases will enable me to face with greater equanimity the steadily increasing burden of expenditure upon the roads."—[OFFICIAL REPORT, 17th April, 1961; Vol. 638. c. 818.]

That postscript has already been seriously criticised in its general application. But whatever its validity may have been in general I wonder whether it may be fairly said about local authority watering vehicles which, after all, exist primarily not to make use of the roads, but to enable local authorities to maintain the roads in good order, and in a state of cleanliness.

Where is the justification for adding even this modest increase to the taxation on a vehicle required for the purpose of maintaining roads in a good state? Surely it cannot be argued that these vehicles make heavy demands on the roads. On the contrary, they are making a worthwhile contribution to the necessitous maintenance of roads in a good condition.

On the grounds advanced by the Financial Secretary that these are but modest increases, I urge that they are so modest as to be a complete irritation and unnecessary. In fact, as was said by my right hon. Friend, when proposing the Amendment, they flow from the fact that the Chancellor desired to increase this range of duties for revenue purposes by about 20 per cent., and adapted and adopted the existing Schedules with no regard for how the increases would fall. We do not think that an adequate case has been made out to resist this Amendment and, therefore, we shall divide the Committee.

Question put, That the words proposed to be left out stand part of the Schedule:—

The Committee divided: Ayes 176, Noes 108.

Division No. 183.]
AYES
[7.5 p.m.


Agnew, Sir Peter
Brown, Alan (Tottenham)
Coulson, J. M.


Aitken, W. T.
Browne, Percy (Torrington)
Craddock, Sir Beresford


Allason, James
Buck. Antony
Critchley, Julian


Arbuthnot, John
Bullard, Denys
Crosthwaite-Eyre, Col. O. E.


Ashton, Sir Hubert
Bullus, Wing Commander Eric
Cunningham, Knox


Atkins, Humphrey
Burden, F. A.
Curran, Charles


Barber, Anthony
Butler. Rt. Hn. R. A. (Saffron Walden)
Dalkeith, Earl of


Baxter, Sir Beverley (Southgate)
Campbell, Sir David (Belfast, S.)
Dance, James


Bell, Ronald
Campbell, Gordon (Moray &amp; Nairn)
d'Avigdor-Goldsmid, Sir Henry


Berkeley, Humphry
Channon, H. P. G.
Deedes, W. F.


Bingham, R. M.
Chataway, Christopher
de Ferranti, Basil


Birch, Rt. Hon. Nigel
Chichester-Clark, R.
Digby, Simon Wingfield


Bishop, F. P.
Cole, Norman
Doughty, Charles


Bossom, Clive
Cooke, Robert
du Cann, Edward


Bourne-Arton, A.
Cerdeaux, Lt-Col J. K.
Duncan, Sir James


Boyd-Carpenter, Rt. Hon. John
Corfield, F. V.
Elliot, Capt. Walter (Carshalton)


Boyle, Sir Edward
Costain, A. P.
Elliott, R. W. (Nwcastle-upon-Tyne, N.)




Emmet, Hon. Mrs. Evelyn
Litchfield, Capt. John
Sharples, Richard


Errington, Sir Eric
Lloyd, Rt. Hon. Selwyn (Wirral)
Shepherd, William


Farr, John
Longden, Gilbert
Simon, Rt. Hon. Sir Jocelyn


Finlay, Graeme
Low, Rt. Hon. Sir Toby
Skeet, T, H. H.


Fisher, Nigel
Lucas, Sir Jocelyn
Smith, Dudley (Br'ntf'd &amp; Chiswick)


Fletcher-Cooke, Charles
McAdden, Stephen
Smithers, Peter


Foster, John
MacArthur, Ian
Smyth, Brig. Sir John (Norwood)


Gammans, Lady
McLaren, Martin
Spearman, Sir Alexander


Gardner, Edward
McLaughlin, Mrs. Patricia
Speir, Rupert


Glover, Sir Douglas
Macmillan, Rt. Hn. Harold (Bromley)
Stevens, Geoffrey


Glyn, Dr. Alan (Clapham)
Maddan, Martin
Studholme, Sir Henry


Goodhew, Victor
Marten, Neil
Talbot, John E.


Gough, Frederick
Matthews, Gordon (Meriden)
Tapsell, Peter


Gower, Raymond
Mawby, Ray
Teeling, William


Grant, Rt. Hon. William
Maxwell-Hyslop, R. J.
Temple, John M.


Grant-Ferris, Wg. Cdr. R.
Montgomery, Fergus
Thomas, Leslie (Canterbury)


Green, Alan
More, Jasper (Ludlow)
Thompson, Kenneth (Walton)


Grimston, Sir Robert
Morrison, John
Turner, Colin


Gurden, Harold
Mott-Radclyffe, Sir Charles
van Straubenzee, W. R.


Hamilton, Michael (Wellingborough)
Nugent, Sir Richard
Vaughan-Morgan, Sir John


Harris, Frederic (Croydon, N.W.)
Oakshott, Sir Hendrie
Vickers, Miss Joan


Harris, Reader (Heston)
Osborn, John (Hallam)
Vosper, Rt. Hon. Dennis


Harrison, Brian (Maldon)
Page, John (Harrow, West)
Wakefield, Edward (Derbyshire, W.)


Harvey, Sir Arthur Vere (Macclesf'd)
Page, Graham (Crosby)
Walder, David


Harvie Anderson, Miss
Pannell, Norman (Kirkdale)
Walker, Peter


Hastings, Stephen
Pearson, Frank (Clitheroe)
Ward, Dame Irene


Heald, Rt. Hon. Sir Lionel
Percival, Ian
Watts, James


Hiley, Joseph
Pike, Miss Mervyn
Webster, David


Holland, Philip
Pitman, I. J.
Wells, John (Maidstone)


Hollingworth, John
Pitt, Miss Edith
Whitelaw, William


Hopkins, Alan
Price, David (Eastleigh)
Williams, Dudley (Exeter)


Hornby, R. P.
Pym, Francis
Williams, Paul (Sunderland, S.)


Hughes-Young, Michael
Quennell, Miss J. M.
Wills, Sir Gerald (Bridgwater)


Hutchison, Michael Clark
Ramsden, James
Wilson, Geoffrey (Truro)


Iremonger, T. L.
Rawlinson, Peter
Wise, A. R.


Jackson, John
Redmayne, Rt. Hon. Martin
Wolrige-Gordon, Patrick


James, David
Rees, Hugh
Woodhouse, C. M.


Jenkins, Robert (Dulwich)
Renton, David
Worsley, Marcus


Johnson Smith, Geoffrey
Ridley, Hon. Nicholas
Yates, William (The Wrekin)


Kerans, Cdr. J. S.
Roberts, Sir Peter (Heeley)



Langford-Holt, J.
Robson Brown, Sir William
TELLERS FOR THE AYES:


Leburn, Gilmour
Roots, William
Colonel J. H. Harrison and


Legge-Bourke, Sir Harry
Seymour Leslie
Mr. J. E. B. Hill.




NOES


Ainsley, William
Hilton, A. V.
Pursey, Cmdr. Harry


Allaun, Frank (Salford, E.)
Holman, Percy
Randall, Harry


Allen, Scholefield (Crewe)
Houghton, Douglas
Redhead, E. C.


Benson, Sir George
Hughes, Hector (Aberdeen, N.)
Reid, William


Bowden, Herbert W. (Leics, S.W.)
Hunter, A. E.
Roberts, Goronwy (Caernarvon)


Bowen, Roderic (Cardigan)
Hynd, H. (Accrington)
Robertson, John (Paisley)


Butler, Herbert (Hickney, C.)
Jay, Rt. Hon. Douglas
Ross, William


Chapman, Donald
Jeger, George
Skeffington, Arthur


Corbet, Mrs. Freda
Johnson, Carol (Lewisham, S.)
Slater, Mrs. Harriet (Stoke, N.)


Craddock, George (Bradford, S.)
Jones, Rt. Hn. A. Creech (Wakefield)
Slater, Joseph (Sedgefield)


Crosland, Anthony
Jones, Dan (Burnley)
Small, William


Cullen, Mrs. Alice
Jones, Elwyn (West Ham S.)
Smith, Ellis (Stoke, S.)


Darling, George
Key, Rt. Hon. C. W.
Snow, Julian


Davies, S. O. (Merthyr)
Lee, Frederick (Newton)
Soskice, Rt. Hon. Sir Frank


Deer, George
Lee, Miss Jennie (Cannock)
Stonehouse, John


Diamond, John
Lever, L. M. (Ardwick)
Stones, William


Dodds, Norman
Mabon, Dr. J. Dickson
Stross, Dr.Barnett (Stoke-on-Trent, C.)


Dugdale, Rt. Hon. John
MacColl, James
Swinger, Stephen


Ede, Rt. Hon. C.
McInnes, James
Symonds, J. B.


Edwards, Robert (Bilston)
McKay, John (Wallsend)
Taylor, John (West Lothian)


Edwards, Walter (Stepney)
McLeavy, Frank
Thompson, Dr. Alan (Dunfermline)


Evans, Albert
Mcpherson, Malcolm (Stirling)
Thomson, G. M. (Dundee, E.)


Fitch, Alan
Manuel, A. C.
Tomney, Frank


Foot, Dingle (Ipswich)
Mitchison, G. R.
Ungoed-Thomas, Sir Lynn


Foot, Michael (Ebbw Vale)
Morris, John
Wainwright, Edwin


Fraser, Thomas (Hamilton)
Moyle, Arthur
Warbey, William


Galpern, sir Myer
Oliver, G. H.
Weitzman, David


Ginsburg, David
Oram, A. E.
Wells, Percy (Faversham)


Gordon Walker, Rt. Hon. P. C.
Oswald, Thomas
White, Mrs. Eirene


Griffiths, David (Rother Valley)
Owen, Will
Wilkins, W. A.


Griffiths, Rt. Hon. James (Lianelly)
Paget, R. T.
Willey, Frederick


Grimond, J.
Pannell, Charles (Leeds, W.)
Williams, W. T. (Warrington)


Hall, Rt. Hn. Glenvil (Colne Valley)
Parker, John
Willis, E. G. (Edinburgh, E.)


Hamilton, William (West Fife)
Peart, Frederick
Wilson, Rt. Hon. Harold (Huyton)


Hannan, William
Prentice, R. E.



Hayman, F. H.
Price, J. T. (Westhoughton)
TELLERS FOR THE NOES:


Herbison, Miss Margaret
Probert, Arthur
Mr. Lawson and Mr. Cronin.

Amendment proposed: In page 32, leave out lines 49 to 55 and insert:


6.
Local authorities' watering vehicles which are not electrically propelled.
—
12 cwt.
10
0
0

—



12 cwt.
16 cwt.
12
10
0

—



16 cwt.
1 ton
15
0
0

—



1 ton
2 tons
15
0
0
2
10
0


2 tons
2½ tons
25
0
0
1
10
0


2½ tons
3 tons
28
0
0
2
0
0


3 tons
4 tons
32
0
0
1
12
0


4 tons
5 tons
38
8
0
1
4
0


5 tons
—
48
0
0

—



—[Mr. H. Wilson.]

Question put, That the words proposed to be left out stand part of the Schedule:—

The Committee divided: Ayes 170, Noes 110.

Division No. 184.]
AYES
[7.15 p.m.


Agnew, Sir Peter
Glover, Sir Douglas
Percival, Ian


Aitken, W. T.
Glyn, Dr. Alan (Clapham)
Pike, Miss Mervyn


Allason, James
Gough, Frederic
Pitman, I. J.


Arbuthnot, John
Gower, Raymond
Pitt, Miss Edith


Ashton, Sir Hubert
Grant, Rt. Hon. William
Price, David (Eastleigh)


Atkins, Humphrey
Grant-Ferris, Wg Cdr. R.
Pym, Francis


Barber, Anthony
Green, Alan
Quennell, Miss J. M.


Baxter, Sir Beverley (Southgate)
Grimston, sir Robert
Ramsden, James


Bell, Ronald
Gurden, Harold
Rawlinson, Peter


Berkeley, Humphry
Hamilton, Michael (Wellingborough)
Redmayne, Rt. Hon. Martin


Bingham, R. M.
Harris, Frederic (Croydon, N.W.)
Rees, Hugh


Bishop, F. P.
Harris, Reader (Heston)
Ronton, David


Bossom, Clfve
Harrison, Brian (Maldon)
Ridley, Hon. Nicholas


Bourne-Arton, A.
Harvey, Sir Arthur Vere (Macolesf'd)
Roberts, Sir Peter (Heeley)


Boyd-Carpenter, Rt. Hon, John
Harvie Anderson, Miss
Robson Brown, Sir William


Boyle, Sir Edward
Hastings, Stephen
Roots, William


Brown, Alan (Tottenham)
Heald, Rt. Hon. Sir Lionel
Seymour, Leslie


Browne, Percy (Torrington)
Holland, Philip
Sharples, Richard


Buck, Antony
Holtingworth, John
Shepherd, William


Builard, Denys
Hopkins, Alan
Simon, Rt. Hon. Sir Jocelyn


Bullus, Wing Commander Eric
Hornby, R. P.
Skeet, T. H. H.


Burden, F. A.
Hughes-Young, Michael
Smith, Dudley (Br'ntf'rd &amp; Chiswick)


Butler, Rt. Hn. R. A. (Saffron Walden)
Hutchison, Michael Clark
Smithers, Peter


Campbell, Sir David (Belfast, S.)
Iremonger, T. L.
Smyth, Brig. Sir John (Norwood)


Campbell, Gordon (Moray &amp; Nairn)
Jackson, John
Spearman, Sir Alexander


Channon, H. P. G.
James, David
Speir, Rupert


Chataway, Christopher
Jenkins, Robert (Dulwich)
Stevens, Geoffrey


Chichester-Clark, R.
Johnson Smith, Geoffrey
Studholme, Sir Henry


Cole, Norman
Kerans, Cdr. J. S.
Talbot, John E.


Cooke, Robert
Langford-Holt, J.
Tapsell, Peter


Cordeaux. Lt.-Col. J. K.
Leburn, Gilmour
Teeling, William


Corfield, F. V.
Legge-Bourke, Sir Harry
Temple, John M.


Costain, A. P.
Litchfield, Capt. John
Thomas, Leslie (Canterbury)


Coulson, J. M.
Lloyd, Rt. Hon. Selwyn (Wirral)
Thompson, Kenneth (Walton)


Craddock, Sir Beresford
Longden, Gilbert
Turner, Colin


Critchley, Julian
Low, Rt. Hon. Sir Toby
van Straubenzee, W. R.


Crosthwaite-Eyre, Col O. E.
Lucas, Sir Jocelyn
Vickers, Miss Joan


Cunningham, Knox
McAdden, Stephen
Vosper, Rt. Hon. Dennis


Curran, Charles
MacArthur, Ian
Wakefield, Edward (Derbyshire, W.)


Dalkeith, Earl of
McLaren, Martin
Walder, David


Dance, James
McLaughlin, Mrs. Patricia
Walker, Peter


d'Avigdor-Goldsmid, Sir Henry
Macmilian, Rt. Hn. Harold (Bromley)
Ward, Dame Irene


Deedes, W. F.
Maddan, Martin
Webster, David


de Ferranti, Basil
Marten, Neil
Wells, John (Maidstone)


Digby, Simon Wingfield
Matthews, Gordon (Meriden)
Whitelaw, William


Doughty, Charles
Mawby, Ray
Williams, Dudley (Exeter)


du Cann, Edward
Maxwell-Hyslop, R. J.
Williams, Paul (Sunderland, S.)


Duncan, Sir James
Montgomery, Fergus
Wills, Sir Gerald (Bridgwater)


Elliot, Capt. Walter (Carshalton)
More, Jasper (Ludlow)
Wilson, Geoffrey (Truro)


Elliott, R.W. (Nwcstle-upon-Tyne, N.)
Morrison, John
Wise, A. R.


Emmet, Hon. Mrs. Evelyn
Mott-Radclyffe, Sir Charles
Wolrige-Gordon, Patrick


Errington, Sir Eric
Nugent, Sir Richard
Woodhouse, C. M.


Farr, John
Oakshott, Sir Hendrie
Woodnutt, Mark


Finlay, Graeme
Osborn, John (Hallam)
Worsley, Marcus


Fisher, Nigel
Page, John (Harrow, West)



Fletcher-Cooke, Charles
Page, Graham (Crosby)
TELLERS FOR THE AYES:


Gammans, Lady
Pannell, Norman (Kirkdale)
Colonel J. H. Harrison and


Gardner, Edward
Pearson, Frank (Clitheroe)
Mr. J. E. B. Hill.




NOES


Ainsley, William
Hayman, F. H.
Probert, Arthur


Allaun, Frank (Salford, E.)
Herbison, Miss Margaret
Pursey, Cmdr. Harry


Allen, Scholefield (Crewe)
Hilton, A. V.
Randall, Harry


Benson, Sir George
Holman, Percy
Redhead, E. C.


Blyton, William
Houghton, Douglas
Reid, William


Bowden, Herbert W. (Leics, S. W.)
Hughes, Hector (Aberdeen, N.)
Roberts, Goronwy (Caernarvon)


Bowen, Roderic (Cardigan)
Hunter, A. E.
Robertson, John (Paisley)


Brown, Rt. Hon. George (Belper)
Hynd, H. (Accrington)
Ross, William


Butler, Herbert (Hackney, C.)
Jay, Rt. Hon. Douglas
Skeffington, Arthur


Chapman, Donald
Jeger, George
Slater, Mrs. Harriet (Stoke, N.)


Corbet, Mrs. Freda
Johnson, Carol (Lewisham, S.)
Slater, Joseph (Sedgefield)


Craddock, George (Bradford, S.)
Jones, Rt. Hn. A. Creech (Wakefield)
Small, William


Crosland, Anthony
Jones, Dan (Burnley)
Snow, Julian


Cullen, Mrs. Alice
Jones, Elwyn (West Ham, S.)
Soskice, Rt. Hon. Sir Frank


Darling, George
Key, Rt. Hon. C. W.
Stonehouse, John


Davies, S. O. (Merthyr)
Lee, Frederick (Newton)
Stones, William


Deer, George
Lee, Miss Jennie (Cannock)
Stross, Dr. Barnett (Stoke-on-Trent, C.)


de Freitas, Geoffrey
Lever, L. M. (Ardwick)
Swingler, Stephen


Diamond, John
Mabon, Dr. J. Dickson
Symonds, J. B.


Dodds, Norman
MacColl, James
Taylor, John (West Lothian)


Dugdale, Rt. Hon. John
McInnes, James
Thompson, Dr. Alan (Dunfermline)


Ede, Rt. Hon. C.
McKay, John (Wallsend)
Thomson, G. M. (Dundee, E.)


Edwards, Robert (Bilston)
McLeavy, Frank
Tomney, Frank


Edwards, Walter (Stepney)
MacPherson, Malcolm (Stirling)
Ungoed-Thomas, Sir Lynn


Evans, Albert
Manuel, A. C.
Wainwright, Edwin


Fitch, Alan
Mitchison, G. R.
Warbey, William


Foot, Dingle (Ipswich)
Morris, John
Weitzman, David


Foot, Michael (Ebbw Vale)
Moyle, Arthur
Wells, Percy (Faversham)


Fraser, Thomas (Hamilton)
Oliver, G. H.
White, Mrs. Eirene


Galpern, Sir Myer
Oram, A. E.
Wilkins, W. A.


Ginsburg, David
Oswald, Thomas
Willey, Frederick


Gordon walker, Rt. Hon. P. C.
Owen, Will
Williams, W. T. (Warrington)


Griffiths, David (Rother Valley)
Paget, R. T.
Willis, E. G. (Edinburgh, E.)


Griffiths, Rt. Hon. James (Llanelly)
Panneil, Charles (Leeds, W.)
Wilson, Rt. Hon. Harold (Huyton)


Grimond, J.
Parker, John



Hall, Rt. Hn. Glenvil (Colne Valley)
Peart, Frederick
TELLERS FOR THE NOES:


Hamilton, William (West Fife)
Prentice, R. E.
Mr. Lawson and Mr. Cronin.


Hannan, William
Price, J. T. (Westhoughton)

Motion made, and Question proposed, That this Schedule be the Second Schedule to the Bill.

Mr. Redhead: In so far as the Schedule gives effect in detail to Clause 5, which the Committee has already approved, I do not imagine that the Committee will want to spend a long time upon the Schedule, but I should like to express some concern at the manner in which the increase in the vehicle licence duty has been brought about in these circumstances.
Given the circumstances in which the Chancellor had made up his mind that he wanted increased revenue under this general heading, I still have a strong feeling, which I expressed a little while ago, that what was done was merely to say, "We want a 20 or 25 per cent. increased revenue from this particular source," and then, lock, stock and barrel, to adapt the existing Schedule, as we now have it here, with the modifications that are requisite to give effect to that purpose, with, as the Financial Secretary has said, a rounding up or rounding down here and there to make a tidy table.
I should have thought that the Chancellor might have taken a look at the

Schedule in detail, and decided whether the provisions to which reference has already been made, which, in very large part, are reflected in this Schedule, were not now ripe for review in the changed circumstances. After all, it is the 1949 Act from which the original provisions flow, and I should very much like to know whether it was seriously considered when this decision was taken whether the Schedule, with its various categories, about some two dozen altogether, could not be simplified to bring about a simplification in administration.
I should like to know, for example, seeing that this duty is collected not by the Customs and Excise Department, but by the county authorities, whether any consultation has taken place with those authorities. It occurs to me that having a Schedule of this description and length, with these various categories and varying kinds of rates of duty under the different headings, it must be an increasing complication to undertake the collection, and a further complication when the figures are altered, as we are altering them in this Schedule.
For that reason, it might be expedient to have an early opportunity of consulting


the county authorities. All the Chancellor has to do is to ask these authorities, which have the work to do, whether some simplification and modification of the Schedule as a whole might not be expediently undertaken at this stage in the history of this duty.
I leave my question at that point in the hope that the Government will be able to explain their intentions for the future. I am sure that the burden of a Schedule of this kind, in administration and collection costs alone, must outweigh even the advantage of the increased rate of duty which is being applied under some of these headings under the Schedule, which we have already been assured ought to be acceptable because they are of such a trifling character.

Mr. Barber: The hon. Member for Walthamstow, West (Mr. Redhead) has made certain very fair points about the contents of this Schedule. I do not think that he would expect me again to go over the ground deployed by the Chancellor and the Financial Secretary when they gave the reasons for this general increase of 20 per cent. Indeed, they were referred to only a short time ago, when we were debating whether Clause 5 should stand part of the Bill.
However, I can assure the Committee that we gave careful thought to the various items and categories referred to in the Second Schedule, For example, the hon. Gentleman will have noticed that excluded from the general increase

are buses and coaches, for the reason that a concession was made to them in the Finance Act, 1959, and that it would have been ridiculous to increase the duty for them on this occasion. On the other hand, I think that I am right in saying—although I have not been able to make inquiries in the time available—that there would have been no consultation with the authorities, because this represented an increase in taxation.

I have noted what the hon. Member said about the terms of the Schedule, and I agree that some of the phraseology in it and the various categories raise difficulties for someone like myself. I wondered what was meant by special categories of
bicycles which are electrically propelled,

and I have not yet solved that problem, although there may be one or two of them in museums. I will draw the Chancellor's attention to what the hon. Member said about consulting the authorities to see whether it is desirable to improve this Schedule on any future occasion on which we deal with it. The hon. Member will not expect me to go further than that in the absence of my right hon. and learned Friend, and I am sure that my right hon. and learned Friend will take note of the hon. Member's comments.

Question put, That this Schedule be the Second Schedule to the Bill:—

The Committee divided: Ayes 175, Noes 109.

Division No. 185.]
AYES
[7.31 p.m.


Agnew, Sir Peter
Channon, H. P. G.
Erring ton, Sir Eric


Aitken, W. T.
Chataway, Christopher
Farr, John


Allason, James
Chichester-Clark, R.
Fisher, Nigel


Arbuthnot, John
Cole, Norman
Fletcher-Cooke, Charles


Ashton, Sir Hubert
Cooke, Robert
Foster, John


Atkins, Humphrey
Cordeaux, Lt.-Col. J. K.
Gammans, Lady


Barber, Anthony
Corfield, F. V.
Gardner, Edward


Baxter, Sir Beverley (Southgate)
Costain, A. P.
Glover, Sir Douglas


Bell, Ronald
Coulson, J. M.
Glyn, Dr. Alan (Clapham)


Bennett, Dr. Reginald (Gos &amp; Fhm)
Craddock, Sir Beresford
Goodhew, Victor


Berkeley, Humphry
Crltchley, Julian
Gower, Raymond


Bingham, R. M.
Crosthwaite-Eyre, Col. O. E.
Grant, Rt. Hon. William


Bishop, F. P.
Cunningham, Knox
Grant-Ferris, Wg Cdr. R.


Bossom, Clive
Curran, Charles
Green, Alan


Bourne-Arton, A.
Dalkeith, Earl of
Grimston, Sir Robert


Boyd-Carpenter, Rt. Hon. John
Dance, James
Gurden, Harold


Boyle, Sir Edward
d'Avigdor-Goldsmid, Sir Henry
Hamilton, Michael (Wellingborough)


Brown, Alan (Tottenham)
Deedes, W. F.
Harris, Frederic (Croydon, N.W.)


Browne, Percy (Torrington)
de Ferranti, Basil
Harris, Reader (Heston)


Buck, Antony
Digby, Simon Wingfield
Harrison, Brian (Maldon)


Bullard, Denys
Doughty, Charles
Harrison, Col. J. H. (Eye)


Bullus, Wing Commander Eric
du Cann, Edward
Harvey, Sir Arthur Vere (Macclesf'd)


Burden, F. A.
Duncan, Sir James
Harvie Anderson, Miss


Butler, Rt. Hon. R. A. (Saffron Walden)
Elliot, Capt. Walter (Carshalton)
Hastings, Stephen


Campbell, Sir David (Belfast, S.)
Elliott, R. W. (Nwcstle-upon-Tyne, N.)
Heald, Rt. Hon. Sir Lionel


Campbell, Gordon (Moray &amp; Nairn)
Emmet, Hon. Mrs. Evelyn
Hill, J. E. B. (S. Norfolk)




Holland, Philip
Morrison, John
Stevens, Geoffrey


Hollingworth, John
Mott-Radclyffe, Sir Charles
Studholme, Sir Henry


Hopkins, Alan
Nugent, Sir Richard
Talbot, John E.


Hornby, R. P.
Oakshott, Sir Hendrie
Tapsell, Peter


Hornsby-Smith, Rt. Hon. Patricia
Osborn, John (Hallam)
Teeling, William


Hughes Hallett, Vice-Admiral John
Page, John (Harrow, West)
Temple, John M.


Hughes-Young, Michael
Page, Graham (Crosby)
Thomas, Leslie (Canterbury)


Hutchison, Michael Clark
Pannell, Norman (Kirkdale)
Thompson, Kenneth (Walton)


Iremonger, T. L.
Pearson, Frank (Clitheroe)
Turner, Colin


Jackson, John
Percival, Ian
van Straubenzee, W. R.


James, David
Pike, Miss Mervyn
Vaughan-Morgan, Sir John


Johnson Smith, Geoffrey
Pitman, I. J.
Vickers, Miss Joan


Kerans, Cdr. J. S.
Pitt, Miss Edith
Vosper Rt. Hon. Dennis


Langford-Holt, J.
Price, David (Eastleigh)
Wakefield, Edward (Derbyshire, W.)


Leburn, Gilmour
Pym, Francis
Walder, David


Legge-Bourke, Sir Harry
Quennell, Miss J. M.
Walker, Peter


Litchfield, Capt. John
Ramsden, James
Wall, Patrick


Lloyd, Rt. Hon. Selwyn (Wirral)
Rawlinson, Peter
Ward, Dame Irene


Longden, Gilbert
Redmayne, Rt. Hon. Martin
Watts, James


Low, Rt. Hon. Sir Toby
Rees, Hugh
Webster, David


Lucas, Sir Jocelyn
Renton, David
Wells, John (Maidstone)


McAdden, Stephen
Ridley, Hon. Nicholas
Williams, Dudley (Exeter)


MacArthur, Ian
Roberts, Sir Peter (Heeley)
Williams, Paul (Sunderland, S.)


McLaren, Martin
Roboson Brown, Sir William
Wills, Sir Gerald (Bridgwater)


McLaughlin, Mrs. Patricia
Roots, William
Wilson, Geoffrey (Truro)


Macmillan, Rt. Hn. Harold (Bromley)
Seymour, Leslie
Wise, A. R.


Maddan, Martin
Sharples, Richard
Wolrige-Gordon, Patrick


Mapp, Charles
Shepherd, William
Woodhouse, C. M.


Marten, Neil
Simon, Rt. Hon. Sir Jocelyn
Woodnutt, Mark


Matthews, Gordon (Meriden)
Skeet, T. H. H.
Worsley, Marcus


Mawby, Ray
Smith, Dudley (Br'ntf'rd &amp; Chiswick)



Maxwell-Hyslop, R. J.
Smithers, Peter
TELLERS FOR THE AYES:


Montgomery, Fergus
Smyth, Brig. Sir John (Norwood)
Mr. Finlay and Mr. Whitelaw.


More, Jasper (Ludlow)
Speir, Rupert





NOES


Ainsley, William
Hamilton, William (West Fife)
Prentice, R. E.


Allaun, Frank (Salford, E.)
Hannan, William
Price, J. T. (Westhoughton)


Allen, Scholefield (Crewe)
Hayman, F. H.
Probert, Arthur


Benson, Sir George
Herbison, Miss Margaret
Pursey, Cmdr. Harry


Blyton, William
Hilton, A. V.
Randall, Harry


Bowden, Herbert W. (Leics, S.W.)
Holman, Percy
Redhead, E. C.


Bowen, Roderic (Cardigan)
Houghton, Douglas
Reid, William


Brown, Rt. Hon. George (Belper)
Hughes, Hector (Aberdeen, N.)
Roberts, Goronwy (Caernarvon)


Butler, Herbert (Hackney, C.)
Hunter, A. E.
Robertson, John (Paisley)


Chapman, Donald
Hynd, H. (Accrington)
Ross, William


Corbet, Mrs. Freda
Jay, Rt. Hon. Douglas
Skeffington, Arthur


Craddock, George (Bradford, S.)
Jeger, George
Slater, Mrs. Harriet (Stoke, N.)


Crosland, Anthony
Johnson, Carol (Lewisham, S.)
Slater, Joseph (Sedgefield)


Cullen, Mrs. Alice
Jones, Rt- Hn. A. Creech (Wakefield)
Small, William


Darling, George
Jones, Dan (Burnley)
Snow, Julian


Davies, S. O. (Merthyr)
Jones, Elwyn (West Ham, S.)
Soskice, Rt. Hon. Sir Frank


Deer, George
Key, Rt. Hon. C. W.
Stonehouse, John


de Freitas, Geoffrey
Lee, Frederick (Newton)
Stones, William


Diamond, John
Lee, Miss Jennie (Cannock)
Stross, Dr. Barnett (Stoke-on-Trent, C.)


Dodds, Norman
Lever, L. M. (Ardwick)
Swingler, Stephen


Driberg, Tom
Mabon, Dr. J. Dickson
Symonds, J. B.


Dugdale, Rt. Hon. John
MacColl, James
Taylor, John (West Lothian)


Ede, Rt. Hon. C.
McInnes, James
Thompson, Dr. Alan (Dunfermline)


Edwards, Robert (Bilston)
McKay, John (Wallsend)
Thomson, G. M. (Dundee, E.)


Edwards, Walter (Stepney)
McLeavy, Frank
Tomney, Frank


Evans, Albert
MacMillan, Malcolm (Western Isles)
Ungoed-Thomas, Sir Lynn


Fitch, Alan
Mallalieu, E. L. (Brigg)
Wainwright, Edwin


Foot, Dingle (Ipswich)
Manuel, A. C.
Warbey, William


Foot, Michael (Ebbw Vale)
Mitchison, C. R.
Weitzman, David


Fraser, Thomas (Hamilton)
Morris, John
White, Mrs. Eirene


Galpern, Sir Myer
Moyle, Arthur
Wilkins, W. A.


Ginsburg, David
Oliver, G. H.
Willey, Frederick


Gordon Walker, Rt. Hon. P. C.
Oswald, Thomas
Williams, W. T. (Warrington)


Griffiths, David (Rother Valley)
Owen, Will
Willis E. G. (Edinburgh, E.)


Griffiths, Rt. Hon. James (Llanelly)
Paget, R. T.
Wilson, Rt. Hon. Harold (Huyton)


Grimond, J.
Parker, John



Hall, Rt. Hn. Glenvil (Colne Valley)
Peart, Frederick
TELLERS FOR THE NOES:




Mr. Lawson and Mr. Cronin.

Clause 6.—(TIME LIMIT FOR RECOVERING UNDER-PAYMENTS AND OVER-PAYMENTS OF VEHICLES EXCISE DUTY.)

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Redhead: I am not quite sure that I appreciate the purpose of this Clause. I have tried to follow it by cross reference to Section 14 of the 1949 Act, but I should like to be assured that this is no more than an attempt to clarify


the previous Act and does not involve any sinister or subtle change in practice; that it is merely designed to facilitate the county authorities in exercising their responsibilities under Section 14 of the previous Act.

Mr. Barber: I think I can assure the hon. Gentleman on this point. As he has obviously appreciated, this Clause amends Section 14 of the Vehicles (Excise) Act, 1949, by providing that the time limit for taking proceedings for the recovery of licence duty either overpaid or underpaid shall be 12 months beginning at the end of any period in respect of which the licence was taken out.
This arises from the change-over in the system of issuing licences. Until September 1960 licences were issued by the calendar year or by the calendar quarter. Now, as the hon. Gentleman knows, they can be issued for any period of 12 months—and, in certain cases, for 4 months—running from the beginning of the month in which the licence was first taken out. As a result, the provisions in Section 14 in the 1949 Act are somewhat inapposite and, in one case, ambiguous. We therefore thought it right to correct this. I should mention as a very relevant factor that the new rules will apply equally to the Revenue and the taxpayer in respect of both underpayment and overpayments. I therefore hope that the Committee will think that the Clause is reasonable.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 7 ordered to stand part of the Bill.

Clause 8.—(SURCHARGES OR REBATES OF AMOUNTS DUE FOR REVENUE DUTIES.)

Mr. Jay: I beg to move, in page 6, line 5, after "Kingdom" to insert:
and having regard to the need to maintain full employment in all parts of the United Kingdom".
We now come to one of the economic regulators which the Chancellor is proposing to impose on us. They are not very popular—they have frightened a great number of people—so I think it is incumbent on us to examine them fairly carefully.
The Clause that we now seek to amend bestows the power to raise or

reduce a group of Customs and Excise duties by an amount up to 10 per cent. Incidentally, I am not quite sure for how often during the course of the year the Chancellor is taking power to do this. At some stage I hope we shall get it clear whether, if he receives the power as now envisaged in the Bill, he will be able to raise all these duties by 10 per cent. one week and a month later raise or reduce them again. However, we shall doubtless come to that later.
In general, we on this side are not opposed to using taxation as a planning instrument which, I gather from the Chancellor's pronouncements up to date, is the purpose of this and the other economic regulator. Indeed, in the 1948 Finance Act the Labour Government took a similar power. I suspect that the Chancellor opposed it at that time, but we took the power to vary Purchase Tax from time to time by Order, in the fashion now suggested.
7.45 p.m.
I was rather surprised to hear in an Answer at Question Time today—given, I think, by the Economic Secretary—that this power to vary Purchase Tax by Order had hardly ever been used in those thirteen years, except for minor correction of anomalies. My recollection is that the Home Secretary, when he was Chancellor, once made a considerable change in Purchase Tax by Order in January of one year. If the present Government had never used the existing powers for this purpose, it would be a little odd that they should now think it necessary to ask for new powers.
However, they are asking for them, and since the twin regulator—the payroll tax, which we are not discussing now—has proved singularly unpopular, it seems that if ever either is used at all it will probably be this one. Indeed, the Economic Secretary seemed to propound a new law. We have had "Boyle's Law" and what was called "Lloyd's Law" during the Budget debate, in which all taxes are passed on to someone else. The Economic Secretary propounded the theory today that if one can find any tax that has not been raised for 30 years one should raise it immediately. If he is approaching this regulator in this spirit, we may find a rather bolder use made of it than had been expected.
We ask the Committee to examine the form of words in Clause 8 (1) by which the Treasury is given power to make use of this instrument. The subsection says that it may be used
If it appears to the Treasury that it is expedient, with a view to regulating the balance between demand and resources in the United Kingdom…
We should like to know what the Government really mean by the words
…regulating the balance between demand and resources…
These are new words. They did not appear in the 1948 Finance Act, still less did they appear in the 1944 White Paper on Employment Policy, which was very much more explicit. Since, obviously, this power will be used as a major weapon of economic policy, do the words
…the balance between demand and resources…
mean the full employment of resources, including, of course, manpower?
Whatever may be his knowledge of economics, I know that the Chancellor is a very considerable legal expert, and, therefore is well placed to advise us on the meaning of those words. Would it be consistent with what he conceives to be
…the balance between demand and resources…
if, perhaps, 10 per cent., 20 per cent. or 30 per cent. of our labour force was unemployed?
I suppose that one could argue—I do not know, but perhaps it might be argued—that that was, in a sense, a balance. I remember that Lord Keynes once said, "Of course, you could balance the Budget at zero". Indeed, one could balance the balance of payments at zero. That would not be a particularly sensible procedure but, as far as the meaning of the word "balance" goes, it could be done.
We should therefore like an assurance from the Government that the words
…with a view to regulating the balance between demand and resources…
mean with a view to maintaining full employment and full production in the economy. I must say that I thought it better put in the 1944 White Paper on Employment Policy, which said quite frankly:

The Government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment…
I do not know why some similar expression could not have been used in introducing this new economic regulator. The Local Employment Act itself was very much clearer and more explicit than this.
The failure of the Government to use some such form of words, their failure to insert in the Clause the phrase "full employment" or the phrase "a high and stable level of employment", rather suggests that, as the Treasury is now looking at this, it may use these powers to seek some balance other than one which would be consistent with full employment all over the country. We want to know whether that is in the Chancellor of the Exchequer's mind. Would he think, for instance—this is not altogether irrelevant or unreal in the present year—that he was entitled, if he were faced with a balance of payments deficit or an excess of imports, to raise taxation by this instrument in order to mop up purchasing power, reduce people's expenditure on imports, and so on, even though it meant substantially decreasing the level of employment? The Clause should be much more tightly drawn so that it is quite clear that the Government cannot use an instrument of this kind for that purpose.
The very looseness of the expression and the vagueness of the explanations given us as to how the Government propose to use this and in what circumstances they would use it show what a very timid conception they have of economic policy at present. I do not believe that this country is at the moment fully employed. When there are large areas in Northern Ireland, Scotland and other parts of the country with considerable unemployment, it cannot be said that the whole of the United Kingdom is fully employed, fully in production, and making as great an effort as it can. In these circumstances it would be quite wrong if the Chancellor of the Exchequer had it in mind, because he was faced with balance of payments difficulties, to impose a general indiscriminate deflation over the whole country when in certain areas, such as Scotland, people were already unemployed. It would merely throw more people out of work and


make unemployment in those areas worse than it is already.
The Government should be trying to get more work into those areas and to restrain over-full employment, if they think it exists, in the more congested areas where we know there is a boom in the building of offices and other activities of that kind causing an extreme shortage of labour. If it is the intention to use this weapon as a general indiscriminate deflationary instrument, it is the wrong way to tackle the problem.
It is rather odd that the right hon. and learned Gentleman, in giving himself these two instruments for the apparent purpose of either restraining or stepping up demands and doing it quickly, has entirely left out of account the ordinary forms of direct taxation. Why does he think that he should have the power of rapidly altering Customs duties in this fashion when he has not applied the same power either to Income Tax or Profits Tax? Why only indirect taxes? After all, if it is in his mind to use, through the Clause, a rise in Customs and Excise duties to restrain inflationary tendencies, he will always be faced with the dilemma that, though people's spending may be cut by that means, prices will also be raised. By this instrument, in which the right hon. and learned Gentleman compels himself to raise all the duties at once if he raises any of them, he will inevitably raise not merely the prices of some luxury items but also the prices of a number of ordinary necessities of life which enter into the cost of living. He may end by achieving a rise in prices and a rise in wage rates, which would defeat his object.
That will be the difficulty whenever this instrument is applied. It would not confront the Government if it were applied to Income Tax or Profits Tax. Therefore, it is slightly odd that it is confined in the Clause to Customs and Excise.
We believe that these powers ought not to be entrusted to the Government in the form in which the Clause is now drafted. We want to know whether the Chancellor endorses again the objective of full employment as set out in the 1944 White Paper. If he endorses that and if this instrument is to be used within

that context, why cannot we have these words included in the Clause and why cannot he accept our Amendment?

Mr. Gower: I want to make one or two brief remarks on some points raised by the right hon. Member for Battersea, North (Mr. Jay). In his reasonable statement in support of the Amendment he referred to the applicability of these instruments to Income Tax and Profits Tax. That has obvious difficulties, which he will recognise. Those forms of taxation involve the preparation of P.A.Y.E. returns, the changing of codes, and so on.

The Temporary Chairman (Sir Samuel Storey): Order. The hon. Member is going very wide of the Amendment.

Mr. Gower: Sir Samuel, I was merely commenting on a point raised by the right hon. Gentleman, but I will not pursue it. I wanted to reflect on it en passant because I thought that the right hon. Gentleman would recognise the difficuties.
On his main point about full employment, it is fairly obvious that the Government's policy in recent years has been at all times to maintain the highest possible level of employment, consistent with the strength of sterling and our general trading position. The record of successive Conservative Governments has shown that we are fully seized of the importance of this issue. On the other hand, I doubt whether including it in this Clause would be practicable or desirable. These changes, by means of the regulator as the wording of the Clause indicates, are designed to meet particular circumstances of demand and resources. The steps to be taken are purely inter-budgetary, and to that extent will be temporary to meet a temporary difficulty.
The maintenance of full employment is a much longer term problem. It is a problem of general policy extending usually over a much longer period. The words of the Amendment are somewhat inconsistent with the aims of the Clause as it stands.

Mr. Ross: The hon. Member for Barry (Mr. Gower) seemed to think that our criticisms have little or no substance. He seemed to suggest that this was merely an inter-budgetary matter and we should not worry very much about


it. The taking of the action will be inter-budgetary, but it is provided by the Clause that the power can carry on until 31st August, 1962, which would take it well beyond any Budget, although during a Budget discussion there would be consideration as to whether it should be continued. How long it would continue would depend on the Order brought before the House of Commons.

The Temporary Chairman: Order. This has nothing to do with the Amendment, which relates to the need to maintain full employment.

Mr. Ross: I am coming to that, Sir Samuel. I was dealing with the point made by the hon. Member for Barry.

The Temporary Chairman: Order. I asked the hon. Member for Barry (Mr. Gower) to keep to the Amendment, and I must ask the hon. Member for Kilmarnock (Mr Ross) to do the same.

Mr. Ross: I am sure, Sir Samuel, that you will not be surprised when I say that I fully intend to devote myself to the Amendment, because it relates to what might well happen in areas such as the one I represent, where we do not always have the proclaimed benefits and blessings which have come to the country from Conservative Governments during the few years of which the hon. Member for Barry spoke.
8.0 p.m.
The hon. Member for Barry began his speech by saying that the Government had maintained full employment, subject to this that or the other. Actually, of course, there are areas in Britain which have not had full employment. One reason why the Prime Minister was unsuccessful when he came to Scotland during the last General Election is that his "Never had it so good" theory does not apply there. There are still 60,000 unemployed in Scotland and, in various areas, the rate of unemployment is not just double that of other parts of Britain, but is four, five and even six times greater. That is what we have suffered in the past. We fear now that as a result of consumer booms and shortages of labour in the London area and in the Midlands the Government will race in with more taxes. I admit that the Government have not taken this kind of action hitherto, but I must point out that when they take action

it should not apply indiscriminately to all parts of the country.
We fear that their remedy will be applied to areas that have not been offending and that have not been benefiting from consumer booms. We fear that, as a result, the unemployment situation that had already exsited in those areas will be aggravated. That is the fear behind the Amendment. That is the reason for the Amendment.
What, actually, is proposed by the Clause? The Government are committed, if they decide to take action, to implement the Clause not merely on one form of tax, but on the lot; Customs and Excise duties, Purchase Tax, the lot. They must all be increased by 10 per cent. as the result of circumstances created by various parts of the country.
My hon. Friends and I fear—particularly if labour is the concern—that the new regulators will apply not merely because of circumstances in Scotland, the North-East, or in Wales—

Mr. Hamilton: Or Northern Ireland.

Mr. Ross: Yes, and Northern Ireland—but that they will be brought about solely as a result of conditions applicable in the already booming areas of the South or the Midlands. It is, of course, because of such conditions that may be caused in certain parts of the country that the Government intend to take this action and to arm themselves with these new weapons. Our complaint is that these weapons are not intended solely for the areas which are contributing to the trouble, but to every area.
What will be the result? It will mean an increase in Purchase Tax on all goods. Some of those goods are made in my constituency. We make a considerable amount of woollen products both for the home and for export markets. We also make a very fine brand of whisky, "Johnnie Walker". This whisky is still made in Kilmarnock, but, I must admit, is not always consumed there. But, if this particular weapon is used, that product will have to go up in price to save the country from the ill-planned industrial efforts of the Government in relation to the overcrowding of the London area and the Midlands. How this will contribute to a proper regulation of the economy I just do not know.
Such action on the part of the Government will result in increases in the cost of living. The Government cannot increase Purchase Tax and all the other forms of taxation without increasing the cost of living. The point is that that increase takes place in areas that have not had the benefit of increased earnings, in relation to the original lack of balance between demand and resources which has been caused in some other part of the country.
Scotland has been suffering from this sort of thing for the past eight years, with the imposition of remedies of the financial variety; limits on credit, credit squeezes and increased interest rates. I have no doubt that they will still be applied. We thus have every right to be concerned that the Government should, before applying these new measures, take into account the provisions of the Amendment. They must keep in mind the need to maintain full employment in all parts of the United Kingdom. Unfortunately, there has been this lack of balance between demand and resources.
There was a time in Scotland when 100,000 people were unemployed. It was a mockery to talk of full employment. Why do hon. Members think that Scotland returned its Labour candidates? Wherever the Prime Minister spoke during the General Election the Government lost a seat. I would like to invite the Prime Minister to come back to Scotland whenever he likes. He is the best propagandist we have for the Labour Party.
I have been trying to press home our fear that the Government seem unable to see beyond London and a few other areas, such as those producing motor cars. There are other areas—in Scotland, Wales and the North-East—which are not offending, and the Government's proposed remedies to regulate the balance between demand and resources are rather rough on those areas.

Mr. Gower: Does the hon. Gentleman realise that in most parts of Wales the unemployment figures have fallen considerably, as they have in Scotland, where, I believe, the figure is somewhat lower than that mentioned by the hon. Gentleman. I believe that the unemployment figure is about 3 per cent., while it is over 1 per cent. for the country generally.

Mr. Ross: Therefore, we are still three times worse off than anywhere else. It was nearly double that eighteen months ago and the regulatory action taken by the showmen opposite is not something to inspire me with confidence that the present position will continue. I am frightened that some of the new powers they are taking will be enforced without due regard to the maintenance of full employment in every part of the country, and not merely in some parts.
It is the indiscriminate and wholesale nature of their remedies, and the application of them, on unoffending parts of the country that is to be feared. It may help the troubles in London or the Midlands, but it will only make things worse in Scotland. The hon. Member for Renfrew, East (Miss Harvie Anderson), who represents, of course, a Scottish constituency, entirely agrees with this.
Part of the trouble is that we do not know very much about how the proposed regulators will operate. We do not know whether the Government really appreciate all the circumstances, and whether they will apply their newfound remedies after taking these facts into consideration. We are, therefore, anxious to include in the Bill the provisions contained in the Amendment, so that full consideration will be given to all parts of the country while the Government are weighing up the extent of the imposition of their new powers. I hope that we shall get some enlightenment from the Government about how they expect them to work.

Mr. Barber: There are two points on which practically all hon. Members in the Committee will be agreed. I think that the Committee approves the general purpose which lies behind this economic regulator, namely, to provide a means of stimulating or discouraging consumption according to the general state of the economy. While, as my right hon. and learned Friend has said, its purpose is not to replace the use of the Bank Rate, hire purchase or other monetary methods, it is recognised that in certain circumstances these particular so-called fiscal weapons may have disadvantages.
I do not think that there is a great deal of difference between the objective which the right hon. Member for Battersea, North (Mr. Jay) has in mind


and that which the Government are following. The right hon. Member referred to the White Paper on Employment, 1944. I can say without any hesitation that it is certainly a primary objective of the Government's economic policy to maintain a high and stable level of employment. There is no difference between the two sides of the Committee on this. Indeed, in the Economic Survey this year we stated the Government's policy of encouraging economic growth and pointed out that the commitment to maintain full employment was an important contribution to this end.
I quote from paragraph 23 of this year's Economic Survey:
It gives an assurance both to capital and to labour that periods of industrial recession and heavy unemployment, such as discouraged capital development in many industries before the war will not be allowed to recur.
Because demand is liable to fluctuate, any Government is, of course, obliged to intervene from time to time to influence the level of demand either upward or downward.
The Government's record in this matter of full employment is there for all to see. While I have not particular details of particular areas, I say in all sincerity that if any proof were required that the Government are in earnest about this matter one has only to consider the latest figures. The unemployment of 299,000, or 1·3 per cent. of the labour force, was the lowest level for the time of year since 1956 and in the same month the number of unfilled vacancies was 353,000, 54,000 more than the number unemployed. The right hon. Member—and, I hope I may say also his hon. Friends—have no wish to suggest that this Government are any less desirous of maintaining full employment than they are. Indeed, if any such contention were made, it would be belied by the facts.
What we have to do is to steer a way between too much demand, on the one hand, and too little demand, on the other. It is generally recognised that excess demand damages the balance of payments and undermines the value of money. To guard against that is perhaps the primary task of the Government at this particular time. Hon. Members will have seen that Clause 8 does not give the Treasury carte blanche. The purpose of this regulator is, as the

right hon. Member pointed out, written into the Clause itself. It is to regulate
the balance between demand and resources in the United Kingdom.
Clearly, this is one of the fundamental ways of maintaining a high and stable level of employment. If demand is too low in relation to available resources, the consequence may be unemployment, but it is also true that if demand is excessive in relation to resources the consequence will almost certainly be inflation and an adverse balance of payments. The ultimate effect of that would almost certainly be a threat to full employment. So I can say without equivocation that the use of this regulator, either to increase demand or to decrease it, will make a significant contribution to the maintenance of a high and stable level of employment, which is the universal objective of this Committee.
8.15 p.m.
I now turn for a few moments to then Amendment itself to look at it more closely, bearing in mind that what we are considering are words to be inserted not in a general statement of policy, but in an Act of Parliament which must be interpreted strictly. The Amendment refers to
full employment in all parts of the United Kingdom.
I do not suppose that the right hon. Member would deny that it might be conducive to the general maintenance of full employment to take action which would necessarily affect some industries more than others.
Again, all of us are only too well aware that in times of general prosperity and high pressure of demand, when over the country as a whole there is a very high level of employment, in some places to which the hon. Member for Kilmarnock (Mr. Ross) referred there is unemployment higher than the national average—so-called pockets of unemployment. This, I think the Committee will agree, is quite a different phenomenon from the general unemployment which is associated with too little demand or the general tightness of labour conditions which we associate with excessive demand.
This is something which no one would dream of trying to deal with by means of a general economic regulator such as


the one we are now discussing. Local unemployment is something which calls for special measures directed to the special circumstances of the localities concerned, measures which can be and are being taken by the Government under the Local Employment Act. If we are to take this part of the Amendment literally—and in an Act of Parliament I do not see how else we could take it—it would apparently mean that so long as there were anywhere in the United Kingdom pockets of unemployment of this kind there would be reason for us to use this regulator so as to increase demand by giving a rebate on Customs and Excise duties, notwithstanding that in so doing we might be creating a considerable excess of demand and aggravating the labour situation over the country as a whole.
Even if we did not go so far as that, it appears clear that if we take this part of the Amendment literally we would be stopped from using this regulator to deal with excessive demand in the country as a whole so long as there were pockets of unemployment in any one part of the United Kingdom. It might be said that I have overlooked the logic of the words at the beginning of the Amendment—"having regard to". All I say on that is that I suppose it could be said that in one sense these words go far to nullify the whole of the rest of the Amendment. They would make it possible for us if we were sufficiently cynical to accept the Amendment because it could be said that we could have regard to anything. It might be said that we were not required to satisfy any precise criteria, or to achieve any standard, but simply "to have regard to", but I do not believe the right hon. Member for Huyton (Mr. H. Wilson), in whose name the Amendment stands, or the right hon. Member for Battersea, North, who moved it, put it forward in that spirit.
Of course, when we are considering the use of this regulator we shall have regard to its effect on the employment position of the United Kingdom as a whole and to our general objective of maintaining a high and stable level of employment in this country. We shall have regard to a great many other things besides, including the purchasing power of our currency, the state of our balance of payments, and the competitiveness of

our industry in world markets. All these things obviously will be taken into account and in any discussion of any action we might take as a result of this Clause they will be appropriate subjects for inquiry and debate. But it does not follow that they are all proper subjects to be mentioned specifically in this Clause, because they are all summed up in the words in the Clause:
with a view to regulating the balance between demand and resources in the United Kingdom.
I say this with great respect, because the right hon. Member for Battersea moved the Amendment with his customary courtesy. I believe that the Amendment is misconceived because the maintenance of a high and stable level of employment is one of the objects of regulating the balance between demand and resources, the very words which have been deliberately written into the Clause and which restrict the purpose for which the Clause can be used.
To sum up, the maintenance of a high and stable level of employment depends on the maintenance of a balance between demand and resources. That is the very purpose of this Customs and Excise regulator. The use of this regulator will, therefore, make a real contribution to the maintenance of full employment, which is the objective of the right hon. Gentleman and the Government alike. In fact, I give the right hon. Gentleman the assurance for which he asked, namely, that it is one of the primary objectives of the Government's economic policy to maintain a high and stable level of employment. But an economic regulator of this kind must of necessity operate on the economy generally, and it must be used in the interests of the economy generally.
The Amendment would not, I believe, be to the advantage of the entire population of the United Kingdom as a whole, and I must, therefore, ask the Committee to reject it.

Mr. W, Hamilton: The hon. Gentleman worries those hon. Members who represent Scottish divisions, and I think that his speech must also worry hon. Members representing Northern Ireland divisions, although I do not see any of those hon. Members here, because he continually asserts that the policy of the Government is to maintain full employment. We accept that, but the point is


that despite what the Government have done, despite these assertions and despite the Local Employment Act, the position in Scotland compared with the rest of England is the same as it was before the introduction of that Act.
There might have been a reduction in unemployment in both Scotland and England, partly as a result of the Local Employment Act, but the gulf between them still exists. I do not think that any hon. Member on this side of the Committee would object to the use of economic regulators. Indeed, our complaint is that there are not enough of them. We would probably go further in the use of economic regulators of one kind or another, but what we are concerned about is that apparently there is no recognition of the fact that the problem in Scotland is different from that in England. This, it seems to us, should cause the Government to look round for some regulator which would discriminate between England and Scotland and take into account the difference in the problems which exist in one part of the United Kingdom compared with another.
I cannot see why the hon. Gentleman is not prepared to accept the Amendment. At the worst, it would be superfluous. It cannot do any damage, and I should have thought that on that score alone the hon. Gentleman would have accepted it.

Mr. Ede: I listened with attention to what the Economic Secretary said, but I do not think that he got near the point which troubles those of us who represent those parts of the country which are vulnerable to the effect of a boom in another part of the country which is not reflected in our areas.
I speak for the North-East Coast. At a time when my neighbours in Surrey are exalting everything that is being done—the level of employment in the Home Counties, the influx of population and the demands which are shown in the rising land values which seem to be inevitable when these periods of limited prosperity occur—my constituents live lives of continual anxiety in mining, in shipbuilding, in ship repairing, and in engineering. They take it all the more acutely because, as their circumstances descend, other people's circumstances seem to rise. Nothing which the hon.

Gentleman said recognised that point because he continually got back to the general position.
It has always been my experience that poor people in a rich area find life more tolerable than poor people in an area where everybody is poor. It is particularly ironical that when people boast that the country as a whole has "never had it so good" there should all the time be the carping fear in the minds of industrially skilled people that the difficulties they are now facing are likely to be aggravated, and nothing which the hon. Gentleman said showed that in the application of these regulators, as they are called, the Government would have power to lighten any burden in one part of the country as long as over the country as a whole they could produce a mass result which they could say justified the action that they had taken.

Mr. Barber: I think that the right hon. Gentleman must have misunderstood what I said. I was making the point that this economic regulator which operates through indirect taxation can only apply to the country as a whole. Because of its very nature, there could not possibly be any exception in respect of a particular area. I hope that the right hon. Gentleman will do me justice in this regard. I went on to say that in the areas about which he is talking we are trying to do what we can under the Local Employment Act. Even if he thinks that that is not enough, it would not be by means of this regulator that we could deal with those areas, because we can have regard only to the country as a whole.

Mr. Ede: The hon. Gentleman should not appeal to me to do him justice. If anybody should appeal for mercy rather than cry out for justice, it is the people who have been managing our economic affairs during the last few years and leaving some of the places in the deplorable plight that those of us who are in touch with them know exists.
Part of the complaint against this proposal is that it does not take account of the harm that may be inflicted or the difficulties that may be presented in certain limited areas. That is the whole point of the Amendment, and I am glad of the confession by the Economic Secretary, in his touching appeal for justice,


that that is one of the fates that will overtake some parts of the country if the Clause remains unamended.

8.30 p.m.

Mr. Ross: The Economic Secretary spoke of the fears which have been expressed from areas of unemployment—the hon. Gentleman calls them pockets of unemployment—and said that the Government already have other legislation and powers under it which they can use when applying themselves to remedying the position in those areas.
What is the chance of getting action taken under that legislation at a time when we are applying this regulator? When we are damping down demand, are we likely to get people moving into those areas to increase production at a time when throughout the Kingdom the Government are reducing demand? It is this wholesale attitude to the question and the harming of these areas unjustifiably at a time when it may be justifiable to take action in other areas that causes us concern.
We have in those areas, and we shall have for a long time, additional resources when no additional resources are available in other parts of the country. If the Government take action to deal with those parts of the country in such away as affects the whole country, they will worsen and exaggerate the position of places like North-East Scotland and Northern Ireland.
I hope that the Government will think again about this. I cannot think of anything that will lead to the growth of nationalism more than the continued behaviour of the Government in the way they have acted in the past eight or nine years. If the Economic Secretary makes his appeal under the Local Employment Act, let him follow it through and see how that Act can be applied at a time when he is introducing this regulator. I tell him that it cannot. I hope that he will think again about this. We have been concerned about this kind of application in the past and we certainly are more concerned at the present time.
The hon. Gentleman spoke about the fall in unemployment figures. I do not know whether he listened the other day to the Secretary of State for Scotland telling us about the number of people

who had left Scotland over the last year. I assure the hon. Gentleman that the unemployment figures in Scotland would have been much worse if people had been content to stay there in unemployment. He will find those people have been employed in the Midlands and the London area. That does not satisfy us that that is the right way of regulating the balance between demand and resources.
If the hon. Gentleman really means what he says, let him apply himself to the fact that there are presently resources unused in Scotland. The application of the Clause simply would not lead to a redress of that balance. In the way that it is being put forward to us, I doubt whether this regulator can measure up to its purpose at all. I am certainly concerned about how it will affect Scotland and industry in Scotland and the employment position.

Mr. Jay: The Economic Secretary's answer was extremely disappointing and showed a complete lack of comprehension of the degree of anxiety felt in large areas of the country about the employment prospects. We are not arguing that it would be right or possible to apply these changes in taxation in certain areas only. That might be argued about the payroll tax later, but it would be impracticable to argue it about this proposal. What we are arguing is that changes should not be applied generally in such a way as to produce undesirable effects in these particular areas.
My hon. Friend the Member for Kilmarnock (Mr. Ross) is quite right. The whole experience of 1958 and 1959 proves over and over again that we cannot get expansion schemes going, whether under the Local Employment Act or any other Act, in the underemployed areas if the Government are causing general deflation over the country as a whole. That is the point which we are trying to get into the heads of the Government.
I cannot take very seriously the rather extreme interpretation which the Economic Secretary applied to the Amendment. He says that, if these words were added, the Government would be precluded from ever doing anything which might lead to anybody losing his job anywhere. He has omitted to notice that we have very


moderately not proposed that the Government's words
regulating the balance between demand and resources
should be omitted in favour of our words, but we propose that our words should be added to those which the Government have already put in the Clause. The hon. Gentleman's interpretation was really somewhat perverse. If, as he so earnestly protests, he is entirely at one with us in wishing to see a high and stable level of employment, he should accept the Amendment.
The hon. Gentleman did not explain what this phrase
the balance between demand and resources
means. He repeated it several times in his speech, but he did not say what it means. Either it means the full employment of resources all over the country, in which case there is every reason for saying so clearly in the Bill, or it means something quite different, something consistent with a good deal of unemployment, in which case our anxieties are aroused again. I think it would be much better if this form of words were altered.
We have it from the Economic Secretary, and from the hon. Member for Barry (Mr. Gower) who has left us now, that the Government's intentions are obviously pure because we have such a high level of employment at the moment. It is not just at this moment that the Government have been in power. In the early months of 1959, unemployment rose to over 600,000. It was 2·8 per cent. in the country as a whole, and in many areas it was 5, 6 or 7 per cent. Although the Economic Secretary said rather casually, almost contemptuously, that he had not with him the figures for individual areas, he must know that unemployment is now close on 7 per cent. in Northern Ireland.
When the Economic Secretary spoke of local pockets of unemployment, as if there were just a few people here and there unemployed and it was a minor problem, he did not seem to realise that

there are great areas of the country, those concerned with shipbuilding, to take one example, which are acutely anxious about employment prospects. The whole of Tyneside, about which my right hon. Friend the Member for South Shields (Mr. Ede) was speaking, Clydeside, Merseyside to some extent, and the Jarrow and Belfast areas, places with large populations, are acutely anxious about employment prospects today. One cannot dismiss them casually as mere pockets of unemployment.

Mr. Barber: I did not say "mere"

Mr. Jay: The hon. Gentleman did not use the word "mere". I give him that. He spoke of pockets of unemployment as though it was a small local difficulty, as the phrase is.
I do not doubt that the Economic Secretary's intentions are pure. Even if Ministers' intentions are pure, Ministers change. The Bill matters more than the intentions of individual Ministers. Ministers are very mobile in the present Government. The present Chancellor of the Exchequer was Foreign Secretary for a remarkably long time and the present Minister of Pensions is almost as stagnant in his office as the British economy is under Tory rule; but, apart from those two, there is a high degree of mobility, and we do not know who will be here in a few years.
In view of all the uncertain prospects and the anxieties which exist today, it would be far better to have the words we propose or something like them written clearly into the Bill. If Ministers really mean what they say, I fail to see why they should be unable to accept the Amendment. In order to encourage them to think again and to make clear how strongly we feel on the matter, my hon. Friends will, I hope, press the Amendment to a Division.

Question put, That those words be there inserted:—

The Committee divided: Ayes 108, Noes 172.

Division No. 186.]
AYES
[8.39 p.m.


Ainsley, William
Bowen, Roderic (Cardigan)
Cliffe, Michael


Allaun, Frank (Salford, E.)
Brockway, A. Fenner
Corbet, Mrs. Freda


Allen, Scholefield (Crewe)
Brown, Rt. Hon. George (Belper)
Craddock, George (Bradford, S.)


Benson, Sir George
Butler, Herbert (Hackney, C.)
Crosland, Anthony


Blyton, William
Castle, Mrs. Barbara
Cullen, Mrs. Alice


Bowden, Herbert W. (Leics, S.W.)
Chapman, Donald
Darling, George




Davies, S. O. (Merthyr)
Jeger, George
Reid, William


Deer George
Johnson, Carol (Lewisham, S.)
Roberts, Albert (Normanton)


de Freitas, Geoffrey
Jones, Rt. Hn. A. Creech (Wakefield)
Robertson, John (Paisley)


Diamond, John
Jones, Dan (Burnley)
Ross, William


Dodds, Norman
Jones, Elwyn (West Ham, S.)
Skeffington, Arthur


Driberg, Tom
Key, Rt. Hon. C. W.
Slater, Mrs. Harriet (Stoke, N.)


Dugdale, Rt. Hon. John
Lee, Frederick (Newton)
Slater, Joseph (Sedgefield)


Ede, Rt. Hon. C.
Lee, Miss Jennie (Cannock)
Small, William


Edwards, Robert (Bilston)
Lever, L. M. (Ardwick)
Snow, Julian


Edwards, Walter (Stepney)
Mabon, Dr. J. Dickson
Soskice, Rt. Hon. Sir Frank


Evans, Albert
MacColl, James
Stonehouse, John


Fitch, Alan
McInnes, James
Stones, William


Foot, Dingle (Ipswich)
Mckay, John (Wallsend)
Strachey, Rt. Hon. John


Foot, Michael (Ebbw Vale)
McLeavy, Frank
Stross, Dr.Barnett (Stoke-on-Trent, C.)


Fraser, Thomas (Hamilton)
MacPherson, Malcolm (Stirling)
Swingler, Stephen


Galpern, Sir Myer
Mallalieu, E. L. (Brigg)
Symonds, J. B.


Ginsburg, David
Manuel, A. C.
Taylor, John (West Lothian)


Gordon Walker, Rt. Hon. P. C.
Mitchison, G. R.
Thompson, Dr. Alan (Dunfermline)


Griffiths, David (Rother Valley)
Morris, John
Thomson, G. M. (Dundee, E.)


Griffiths, Rt. Hon. James (Llanelly)
Moyle, Arthur
Wainwright, Edwin


Hall, Rt. Hn. Glenvil (Colne Valley)
Oliver, G. H.
Warbey, William


Hamilton, William (West Fife)
Oswald, Thomas
Weitzman, David


Hayman, F. H.
Owen, Will
White, Mrs. Eirene


Herbison, Miss Margaret
Paget, R. T.
Wilkins, W. A.


Hilton, A. V.
Parker, John
Willey, Frederick


Holman, Percy
Peart, Frederick
Williams, W. T. (Warrington)


Houghton, Douglas
Prentice, R. E.
Willis, E. G. (Edinburgh, E.)


Hunter, A. E.
Price, J. T. (Westhoughton)
Wilson, Rt. Hon. Harold (Huyton)


Hynd, H. (Accrington)
Probert, Arthur



Janner, Sir Barnett
Randall, Harry
TELLERS FOR THE AYES:


Jay, Rt. Hon. Douglas
Redhead, E. C.
Mr. Lawson and Mr. Cronin.




NOES


Agnew, Sir Peter
Foster, John
Marten, Neil


Allason, James
Gammans, Lady
Matthews, Gordon (Meriden)


Atkins, Humphrey
Gardner, Edward
Mawby, Ray


Barber, Anthony
Glover, Sir Douglas
Maxwell-Hyslop, R. J.


Baxter, Sir Beverley (Southgate)
Glyn, Dr. Alan (Clapham)
Montgomery, Fergus


Bell, Ronald
Glyn, Sir Richard (Dorset, N.)
More, Jasper (Ludlow)


Bennett, Dr. Reginald (Gos &amp; Fhm)
Goodhew, Victor
Morrison, John


Biggs-Davison, John
Gower, Raymond
Nugent, Sir Richard


Bingham, R. M.
Grant, Rt. Hon. William
Oakshott, Sir Hendrie


Bishop, F. P.
Grant-Ferris, Wg Cdr. R.
Osborn, John (Hallam)


Bossom, Clive
Green, Alan
Page, John (Harrow, West)


Bourne-Arton, A.
Grimston, Sir Robert
Page, Graham (Crosby)


Boyd-Carpenter, Rt. Hon. John
Grosvenor, Lt.-Col. R. G.
Pannell, Norman (Kirkdale)


Boyle, Sir Edward
Gurden, Harold
Pearson, Frank (Clitheroe)


Brewis, John
Hamilton, Michael (Wellingborough)
Percival, Ian


Brown, Alan (Tottenham)
Harris, Frederic (Croydon, N.W.)
Pike, Miss Mervyn


Browne, Percy (Torrington)
Harris, Reader (Heston)
Pitman, I. J.


Buck, Antony
Harrison, Brian (Maldon)
Pitt, Miss Edith


Bullard, Denys
Harrison, Col. J. H. (Eye)
Price, David (Eastleigh)


Bullus, Wing Commander Eric
Harvey, Sir Arthur Vere (Macclesf'd)
Pym, Francis


Burden, F. A.
Harvie Anderson, Miss
Quennell, Miss J. M.


Butler, Rt. Hn. R. A. (Saffron Walden)
Hastings, Stephen
Ramsden, James


Campbell, Sir David (Belfast, S.)
Heald, Rt. Hon. Sir Lionel
Rawlinson, Peter


Carr, Compton (Barons Court)
Hiley, Joseph
Redmayne, Rt. Hon. Martin


Channon, H. P. G.
Hill, J. E. B. (S. Norfolk)
Rees, Hugh


Chataway, Christopher
Holland, Philip
Renton, David


Chichester-Clark, R.
Hollingworth, John
Ridley, Hon. Nicholas


Cole, Norman
Hopkins, Alan
Roots, William


Cooke, Robert
Hornby, R. P.
Seymour, Leslie


Cordeaux, Lt.-Col. J. K.
Hornsby-Smith, Rt. Hon. Patricia
Sharples, Richard


Corfield, F. V.
Hughes Hallett, Vice-Admiral John
Shepherd, William


Costain, A. P.
Hughes-Young, Michael
Simon, Rt. Hon. Sir Jocelyn


Coulson, J. M.
Hutchison, Michael Clark
Skeet, T. H. H.


Craddock, Sir Beresford
Iremonger, T. L.
Smith, Dudley (Br'ntf'd &amp; Chiswick)


Critchley, Julian
Jackson, John
Smithers, Peter


Cunningham, Knox
James, David
Smyth, Brig. Sir John (Norwood)


Curran, Charles
Johnson Smith, Geoffrey
Spearman, Sir Alexander


Dalkeith, Earl of
Kerans, Cdr. J. S.
Speir, Rupert


Dance, James
Langford-Holt, J.
Stevens, Geoffrey


d'Avigdor-Goldsmid, Sir Henry
Leburn, Gilmour
Stoddart-Scott, Col. Sir Malcolm


Deedes, W. F.
Litchfield, Capt. John
Studholme, Sir Henry


de Ferranti, Basil
Lloyd, Rt. Hon. Selwyn (Wirral)
Talbot, John E.


Digby, Simon Wingfield
Longden, Gilbert
Teeling, William


du Cann, Edward
Loveys, Walter H.
Temple, John M.


Duncan, Sir James
Lucas, Sir Jocelyn
Thomas, Leslie (Canterbury)


Elliot, Capt. Walter (Carshalton)
McAdden, Stephen
Thompson, Kenneth (Walton)


Elliott, R. W. (Nwcstle-upon-Tyne, N.)
MacArthur, Ian
Thompson, Richard (Croydon, S.)


Emmet, Hon. Mrs. Evelyn
McLaren, Martin
Turner, Colin


Errington, Sir Eric
McLaughlin, Mrs. Patricia
van Straubenzee, W. R.


Farr, John
Maddan, Martin
Vaughan-Morgan, Sir John


Fisher, Nigel
Marlowe, Anthony
Vickers, Miss Joan




Vosper, Rt. Hon. Dennis
Wells, John (Maidstone)
Wolrige-Gordon, Patrick


Wakefield, Edward (Derbyshire, W.)
Whitelaw, William
Woodhouse, C. M.


Walder, David
Williams, Dudley (Exeter)
Woodnutt, Mark


Walker, Peter
Williams, Paul (Sunderland, S.)
Worsley, Marcus


Wall, Patrick
Wills, Sir Gerald (Bridgwater)
Yates, William (The Wrekin)


Ward, Dame Irene
Wilson, Geoffrey (Truro)



Webster, David
Wise, A. R.
TELLERS FOR THE NOES:




Mr. Finlay and Mr. G. Campbell.

Wing Commander Eric Bullus: I beg to move, in page 6, line 28, to leave out from "excise" to "but" in line 29.
I understand that it will be convenient for the Committee also to discuss the Amendment in page 6, line 30, leave out "other", and the Amendment to Schedule 4, page 34, line 10, leave out paragraph 1.
It will be appreciated that it is the Chancellor's intention to apply this regulation to all indirect taxation but I submit that the duty on dog-race betting ought not to be treated in the same manner. This duty is in a special position because it is discriminatory. There is no duty on horse-race betting. It follows that a surcharge would increase this unfair discrimination.
Along with other hon. Members, I have tabled a new Clause to deal with the question of the 10 per cent. tax discrimination and we can pursue the matter at length when we come to debate that Clause. Meanwhile, I hope that the Economic Secretary will realise that these Amendments give the opportunity to call attention to the existing discrimination again dog racing. I am the Member for a Wembley constituency and I am chairman of an all-party group who object to this discriminatory approach by the Treasury. Successive Chancellors of the Exchequer have been interviewed by all party deputations. Regularly those Chancellors have admitted the justice of our case but nothing has been done.
It seems that because greyhound racing and its administration are run so efficiently it is penalised in this way. These Amendments give opportunity to protest against this surcharge on a duty which is discriminatory in itself.

Mr. Barber: My hon. and gallant Friend the Member for Wembley, North (Wing Commander Bullus) is, I know, a persistent campaigner against the 10 per cent. pool betting duty with which the bookmakers' licence duty is linked. Both he and I are in some difficulty on

this occasion, because I understand, Sir Gordon, that although we are considering these three Amendments together, the Amendment in page 6, line 30, at end insert:
and pool betting duty in respect of bets made by way of a totalisator set up on a dog racecourse
is out of order and, therefore, it would be out of order for me to consider excluding the pool betting duty on stakes made on totalisators at greyhound race courses from the ambit of this Customs and Excise regulator. Consequently, I can consider only the case of the bookmakers' licence duty.
I think it will be agreed that we have adopted the right course for this regulator in maintaining that all Customs and Excise duties should be within its scope unless there are positive and compelling reasons for leaving them out. As the Committee knows, protective duties and anti-dumping duties, for obvious reasons, have been excluded. Television licence duty and vehicle licence duty have been left out, because they are collected by the Post Office, and also because frequent temporary changes would cause confusion at post office counters. We have also left out most of the other excise licence duties because they are, in effect, only annual registration fees.
There is, I would suggest, with great respect to the arguments put forward by my hon. and gallant Friend, no cogent reason for excluding either the pool betting duty, the merits of which I cannot go into on this occasion because of the rules of order, or any part of it. The inclusion of the bookmakers' licence duty, which we are permitted to discuss on this Amendment, is purely consequential on the inclusion of the pool betting duty which it countervails.
To sum up, it would not be in order to exclude from the regulator the pool betting duty in respect of bets made on the greyhound totalisator. While I am not permitted to enlarge on this, I should like to state that I believe there are sound reasons for retaining the duty.


But the bookmakers' licence duty which the Committee is considering in these Amendments exists only in order to countervail the pool betting duty. I think that my hon. and gallant Friend would agree therefore that it would be quite wrong to exclude it.
Quite apart from that, the great advantage of the regulator is that it will be widely based. It covers practically all the Customs and Excise duties and, consequently, I believe that it would not be right to exclude this particular duty. Whatever the merits may be regarding the pool betting duty, which, of course, may be discussed on some other occasion for all I know, I think that my hon. and gallant Friend will agree, in view of the way in which the Amendments have to be considered, that it would be quite out of the question to exclude a countervailing duty like the bookmakers' licence duty. As this duty countervails one part of the pool betting duty which cannot be excluded from the regulator, it seems to me that there are overwhelming reasons for asking the Committee not to accept the Amendments.
I hope that with that explanation, and without prejudging whatever views my hon. and gallant Friend may have on the merits of the pool betting duty, which we cannot consider on this occasion, he will not feel it necessary to press the Amendments.

Wing Commander Bullus: I am not entirely satisfied with the reply of the Economic Secretary. I have made my case on behalf of two hon. Members opposite who put down these Amendments to which I merely put my name and then I found myself landed with them. I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

Motion made and Question proposed, That the Clause stand part of the Bill.

Mr. William Warbey: I hope that the Committee will oppose this Clause, the more so after hearing the reply of the Economic Secretary to an Amendment moved earlier by my hon. Friend. Unfortunately, we have had previous experience, under an Administration composed from the party opposite if not the present Administration, of the

use of measures to restrain demand in order to permit not merely disinflation but, along with it, an increase in unemployment. That has actually happened. It was perhaps dignified by the name of increasing the flexibility and mobility of labour, but, in fact, that is what happened.
The Economic Secretary may not like to accept that it was the malicious intention of the then Administration to bring about the effects which proceeded from the causes, but, nevertheless, they did follow and in doing so supported the theory pronounced by a good many Government supporters in the economic Press. I fear, therefore—this is my first objection to the Clause—that if this regulator is used at all during the period with which we are concerned in this Clause, namely, the period up to 31st August next year, it will be used only in an up direction. I mean the general 10 per cent. increase in Excise Duty and Purchase Tax.
The Chancellor of the Exchequer has delivered various homilies about the danger of wage increases and of increasing consumer demand. We read in the economic Press and in the city editors' columns how there is a growing danger of inflation and that, sooner or later, it will be necessary to apply one of these economic regulators. Since the payroll tax is not much in favour, this is the one which is singled out for use. Therefore, I think that we are likely to see the use of this regulator in an upward direction during the coming year.
What the Committee is being asked to consider now is whether it will agree to an increase of something like £225 million in indirect taxation. That is what we are being asked to approve. It is true that at a later stage we shall be asked, in the course of an hour and a half of debate, to pass an Order. But the real business is being done now. It is now that we are being asked to give the Chancellor of the Exchequer power to increase taxation by £225 million during the coming year.
9.0 p.m.
That is not all, because this is only one of a series of measures which represent a combined operation against the standard of living of the masses of the people and in the interests of the wealthier section of the community.


Clause 26 of the Bill contains another economic regulator which also gives power to increase indirect taxation, which will be passed straight to the consumer.

The Chairman: The hon. Member must confine himself to Clause 8.

Mr. Warbey: With great respect, Sir Gordon, I was merely trying to produce arguments against Clause 8 by showing that it is part of a series of steps being taken by the Chancellor of the Exchequer. I hope that I may be allowed to refer to these other measures in order to put the thing in its context.

The Chairman: We are concerned now only with what is in Clause 8—with one step at a time.

Mr. Warbey: One step at a time may be enough for the Chancellor. It is exactly my complaint against him that he has been proceeding one step at a time, very cautiously and very timidly, because he realises the howl of rage which would have greeted him if, when putting forward his Budget, he had incorporated in it, at one fell swoop, all the measures which will add to the cost of living by means of increasing indirect taxation and the poll tax.
Although in this Clause we are only concerned with a sum of up to about £225 million, nevertheless the total effect of all the measures and the various steps which the Chancellor is taking—of which this is only one—will be to increase indirect taxation and the poll tax by something over £800 million in the current year, which is about ten times the amount which the Chancellor is giving, in the form of tax concessions, to the Surtax payers. I wonder what would have happened in the House, and still more in the country, if the Chancellor had had the courage to say that and do it in the Budget.

The Chairman: I am sorry to interrupt the hon. Gentleman again but we are now concerned with the Question, "That the Clause stand part of the Bill". We are concerned only with Clause 8.

Mr. Warbey: I understand that, Sir Gordon, but I thought that I would be permitted to adduce arguments to show that this proposal forms part of a series of proposals designed substantially to in-

crease indirect taxation while, at the same time, direct taxation is being reduced. I will only add to what I have already said on this point by saying that this is one of such a series of stages and, as such, should be opposed, because it represents part of the general process of decreasing progressive taxation and increasing regressive taxation.
That is what the Government are aiming at in accordance with their general policy, announced by the President of the Board of Trade, of providing two kinds of social justice—one for the rich and another for the poor, which is, as The Times put it, restoring the pre-war standard of such incomes. The Government are engaged in the general process of redistributing incomes in favour of the wealthier section of the community, and this Clause is part of the process. That is one of my objections to it.

Sir E. Boyle: I should like to clear this matter up. Direct taxation yields a higher percentage of the total revenue now than in 1951, and next year it will yield £398 million more for the coming financial year than it did in the previous financial year. Whatever views of the theory of Government policy the hon. Gentleman may hold, his criticisms do not apply to Government economy policy at this moment.

Mr. H. Wilson: Would my hon. Friend the Member for Ashfield (Mr. Warbey) elucidate from the Financial Secretary whether, under the heading of direct taxation, he does or does not include the poll tax?

Sir E. Boyle: I am talking about direct taxation—Income Tax and Profits Tax. With respect to the hon. Member for Ashfield, who spoke of the buoyancy of the revenue, that does not tell the whole story, because marginal taxation next year on many incomes will be a good deal higher. I am not meaning to argue the fundamentals with the hon. Gentleman. I am merely pointing out that his criticisms simply cannot be sustained at the present time in view of the prospective yield of taxation.

Mr. Warbey: Yes, but, unfortunately, I am not permitted by the rules of order to develop this point as fully as I should like to do. I had certainly included in the general phrase "indirect taxation"


a poll tax such as the National Insurance contribution and the National Health Service charge. When all these are taken into account, we have a very different picture indeed. Also, to put the record straight, we have to take into account changes made in the sphere of direct taxes themselves, which, although they do not affect the total amount raised, have during the course of several Tory Budgets over the past ten years, again favoured the higher income groups.
I want to give two more reasons why I object to this Clause. One is that it is a heaven-sent means of manipulating the economy for political purposes.

Mr. Ede: Why should my hon. Friend attribute this to heaven?

Mr. Warbey: I do not know where the Chancellor got his inspiration in this case, but, certainly, from the point of view of the Conservative Party, the inspiration is of a high, and could be of an unfortunately successful, character. We have had experience of the manipulation of the economy for political purposes. It was done before the 1955 General Election; it was done before the 1959 General Election, and I have no doubt that the Conservatives will endeavour to do it again next time.
If we pass this Clause, we are presenting them with an additional very effective and very easy means of manipulating the economy to their advantage. Having raised indirect taxes and the cost of living during the period between elections, they can then very conveniently reverse the process in the few months before a General Election, and they can do so if, in the meantime, they have raised this tax by 10 per cent., and if they have taken advantage of Clause 26 as well, because they would then be in a position to reduce indirect taxation by a total amount approaching £700 million, which would be a very convenient and useful hand-out on the eve of a General Election.
Therefore, I suggest that those hon. Members—and I am sure that they are not confined to one party—who are interested in the incorruptibility of our fiscal system will regard this Clause as putting a dangerous weapon into the hands of those who may use it.
I agree that there is an argument for economic regulators. There are many which I and my hon. Friends would favour, but this is not one of them. Moreover, it is not one of them mainly for the reasons which I have given but also because if the economy is overturned by an economic crisis due to international speculation with the £ or the pressure of interests who are worried because we are not following a sufficiently orthodox financial policy in this country, then the Chancellor ought to introduce an interim Budget and a second Finance Bill so that his proposals may be properly debated, with opportunity for amendment and opportunity to consider a number of different methods.
In this way we should have a means of dealing with such an economic difficulty by a co-ordinated series of financial, economic and monetary measures which would enable us to deal with the problem equitably, so that any burden would fall on the shoulders of those best able to bear it. That is a better method rather than, as is now proposed, putting into the Chancellor's hands a power to take, whenever he likes and almost at a stroke of the pen, a blind swipe at the standard of living of the masses of the people.

Mr. F. A. Burden: I am sure that the hon. Member for Ashfield (Mr. Warbey) does not expect the regulator to have a great effect on the next election for I am sure that even he does not expect an election within the next year and this regulator will operate only until 31st August, 1962.

Mr. Warbey: What I had in mind was that the Chancellor would use the regulator to increase the tax during the current year and then reduce it in the pre-election year.

Mr. Burden: Again, the hon. Member is quite wrong. The Chancellor could just as easily increase taxation next year and reduce it before an election, if he so wished, whether there was a regulator or not.
The great virtue of the regulator is in its flexibility and the fact that it enables the Chancellor to correct before it arises any difficulty which he or his financial experts foresee. If it were necessary for him first to come to Parliament, through budgetary action, to increase or reduce taxation to meet the situation, then the


greatest virtue of this regulator and the whole basis of this idea would be lost. The difficulty would be upon us and probably insurmountable before any appropriate action could be taken.
If the hon. Member casts his mind back he will agree that a great difficulty in the retail trade over many years was created by the fact that at the time of the Budget each year there was an expectation that Purchase Tax would be either increased or lowered, and, as a consequence, there was a hiatus in trading. This meant that retail firms would not buy, because of the uncertainty. I assure the hon. Member that a considerable amount of unemployment was created as a result in certain industries.
I know that many hon. Members opposite probably do not agree with some of the details, but it has been clear from what has been said that in principle they agree that there should be an economic regulator—

9.15 p.m.

Mr. J. T. Price: The hon. Gentleman is obviously speaking from personal knowledge of trade and industry, with which he is identified, but those who have to lay up stocks of goods and put them in the shops for sale are not at all disturbed by any prospect of an increase in Purchase Tax. They are concerned when the tax comes down and lands them with a lot of stock for which they have paid high prices. Therefore, the danger that he fears does not occur in practice.

Mr. Burden: I shall deal with that point, which is a perfectly legitimate one. I have always expressed myself in this House as being opposed, in principle, to Purchase Tax, but if we are honest with ourselves we have to accept that whether the party opposite is in power, or we are, this is a proper way of raising taxation presently needed, and that a similar form of tax will be with us for probably as long as the hon. Gentleman or I will be interested, or in this House.
The fact that the regulator is flexible and can be imposed at any point does not, in fact, mean that stores will run down their stocks as much as possible at a given period. They must maintain a sufficiency of stock with which to trade

freely. The conditions are not the same as when the tax can be imposed at any time. I hope, however, that my right hon. and learned Friend will not find it necessary to increase Purchase Tax.
In some quarters there is doubt about the precise scope of this Clause. If the power to vary under the regulator is exercised, must the prescribed variation apply to all the duties specified in subsection (3), or is it permissible within the terms of the subsection to vary, for instance, only Purchase Tax, or one of the other taxes indicated in paragraphs (a) and (b)? I hope that what is contemplated will be made clear.

Mr. Anthony Crosland: This is clearly one of the most important Clauses of the Bill, and though I take a view rather different from that taken by my hon. Friend the Member for Ashfield (Mr. Warbey), I am also sorry that in this debate we have not yet managed to discuss the basic purpose of the Clause and whether it provides a proper weapon to achieve that purpose. I welcome the Clause in principle, despite its dangers, partly because it is an additional regulator, and I think that we badly need one, and partly because we need one that can be operated between Budgets.
If we consider what we all now agree to be the rather deplorably slow rate of growth in this country, we can also agree that one of the causes has been the unsteadiness of our growth over the last ten years. If we could steady the rate of growth from year to year we should certainly get a more rapid rate of growth over the average of years, and I take it to be our common purpose to try to get away from this movement by fits and starts—go slow, go fast—and get something steadier.
That is a common objective. The difficulty is to decide what precisely can be steadied—what element in total demand can be steadied, and how. Clearly, there is little that we in this country can do in this direction about exports. We cannot control the amount that we should like to export, because that depends on factors completely outside our control. We certainly cannot control investment in stocks. It has also proved a great deal more difficult problem than many assumed after the war to control fixed investment. The measures which we have to control it have operated very slowly,


and it has been found extremely difficult to get a steady rate of growth in fixed investment.
It is becoming clearer, as I assume that it became clear to the Chancellor of the Exchequer when he was preparing the Budget, that we in this country must make our main aim of policy, if we want steady growth, the securing of a steady rate of increased consumption. The right policy for the Government to adopt is to say in principle that we in this country are aiming at, let us say, a 4 per cent. rate of increased growth per year and that the first way of achieving this is also to aim at a 4 per cent. rate of increased consumption per year. That is the thing we try to study.

Mr. Burden: We all agree that we should like to raise this country's consumption by 4 per cent. per annum, but that is tied to our power to increase our exports to compensate for that increase.

Mr. Crosland: Yes, of course, it is tied to that. It goes without saying that unless we can achieve a healthy balance of payments we cannot do anything. I am assuming that other aspects of Government policy are directed to achieving a healthy balance of payments. We then come back to the rate of growth.
My point is that, if we are to have steady growth as a whole, we must go for a steady rate of increase in consumption. We have singularly failed to achieve this over the last few years. I am certain—in this I agree with what I take to be the intention of the Chancellor of the Exchequer—that if we are to get this we must have more efficient regulators over consumption. The difficulty is to know what are the right regulators to use. It is becoming more and more clear that monetary policy—with its influence on consumption, investment, stocks and practically everything—is an all but useless regulator.
I agree very strongly with the conclusions of the Radcliffe Committee about very much writing down the whole rôle of monetary policy. One of the reasons why I like the Clause is that it marks a very definite step by the Government away from monetary policy towards fiscal policy, which I am sure that we on this side welcome. If we are to reject

monetary policy as our main regulator, we come down to fiscal policy in some form or other. Before coming down to fiscal policy, we could go on with what, despite the Government's lip-service to monetary policy, has in fact been their main policy over the last few years. This is to try to exercise control through hire-purchase restrictions. Nobody can say that these are not effective. In a sense they are effective. They operate too effectively in a comparatively small part of the country. If there is too much demand in the country and the Chancellor of the Exchequer wants to damp it down, almost the entire effect of his damping down is felt in a very small number of places—in the motor and consumer durable industries.
Most of us now take the view that to rely primarily on hire-purchase control concentrates the whole thing on too few places. It concentrates it on Coventry, for instance, and a limited number of other places. It does so very painfully. Therefore, I welcome this regulator as a method of controlling consumption less violently and painfully and in a less concentrated form than that achieved by hire-purchase restrictions.
I disagree with my hon. Friend the Member for Ashfield, who looked at this from the point of view of the distribution of income. He rather asked why this was done by indirect taxation at all, implying that the Government could have as a regulator something which operated on direct taxation. I do not think that changes in direct taxation could possibly be used as a sufficient short-term planning regulator, because they operate much too slowly. They do not take effect for months and months. The whole purpose of having such a regulator is to have something which will bite very quickly.
I am clear that the regulator, whatever it is, must be mainly couched in terms of indirect taxation. This certainly leads to the danger which my hon. Friend had in mind, that over a period of years indirect taxation might be higher in consequence of having this regulator, but there is no particular reason in logic why that should be so. If it is used primarily as a regulator, there is no reason why the taxes which will be changed under the Clause should be any higher on balance in five years' time than they are now. It may be, as my hon. Friend fears, that


they will be higher due to the sinister machinations of the Tory Party. I share much of his cynicism in this respect, but I have far too much confidence in the ability of the Government with their existing weapons to do something sinister before an election. The fact that they have this additional regulator will not make their evil intentions any more effective in practice than they have already been.
It is clear that there are dangers in this. I know that my right hon. Friend the Member for Huyton (Mr. H. Wilson) wants to draw attention to the dangers of abuse of Parliamentary procedure, of this regulator being used in too arbitrary a fashion. I will leave him to make that point. I can see possibilities of abuse in this, but, in principle, I welcome it as a definite move, so far as one can judge, away from the excessive reliance on monetary policy which we have had in the past few year in the direction of greater control and greater planning of the economy in the interests of steady growth.

Mr. Gower: I am entirely in agreement with the hon. Gentleman the Member for Grimsby (Mr. Crosland). I hope that his views are those of the Opposition at large. The hon. Member for Ash-field (Mr. Warbey) obviously does not want this regulator in the Bill. He wants the Clause left out, but I would be disappointed if that were to happen.
This can be described as one of the most imaginative parts of the Bill and among the most imaginative concepts of the Chancellor in his attempt to introduce something more flexible than the means at present at his disposal. The hon. Member for Ashfield suggested that this was designed largely for election purposes. I thought that there was a complete answer to that, since the Chancellor has limited its operation until August of next year. If my right hon. Friend then wishes to take powers to permit him to continue it, he must come to the House again when, no doubt, the matter will be fully debated, just as it is at present being scrutinised.
Apart from that, I like to feel that the Chancellor recognises that this is in the form of an experiment. The Chancellor and the hon. Member for Grimsby have realised that there is a genuine need for something to supplement the

measures which have been available in the past to enable Chancellors to deal with sudden changes in the economy. Having decided on this particular type of regulator, the Chancellor is to give it a trial for perhaps just over a year.
Surely hon. Gentlemen opposite will agree that that is a reasonable proposal to make. The hon. Member for Ashfield seemed to ignore the fact that in the past, apart from budgetary policy, when there have been sudden difficulties the Chancellor and his predecessors have been largely bound to resort to changes in the Bank Rate and to sudden restrictions on hire purchase. This matter was referred to by my hon. Friend the Member for Gillingham (Mr. Burden). Although the Chancellor has been able to use those forms of restrictions and can, perhaps, curtail bank credit, he has very few other resources at his disposal to deal with sudden difficulties.
But now we have a reasonable proposal for something which will supplement those other steps and which will enable the Chancellor to take that instant step, when necessary, to prevent the development of a more serious situation. At the first sign of danger he will be able to come to the House and present hon. Members with an Order—which will be subject to debate—and that Order will have effect fairly quickly.
I agree with the hon. Member for Grimsby, who is at variance with the right hon. Member for Battersea, North (Mr. Jay), a former Financial Secretary to the Treasury, who considers that this should be applied to Income Tax and Surtax. I cannot see how he can suggest that, since so much Income Tax and Surtax is paid at the end of the financial year. Thus, the effect could only be limited to those on P.A.Y.E. and they would have to bear the whole brunt of the regulator proposed by the hon. Member for Battersea, North.

Mr. Jay: I did not refer to Income Tax, but to Profits Tax. This Government, as well as previous ones, have made changes in Profits Tax with the purpose of regulating the economy.

Mr. Gower: Then perhaps the right hon. Gentleman was suggesting or implying that it could be applied to Income Tax. However, I believe that this is a significant, interesting and imaginative


proposal and I hope that hon. Members will approve this experimental period of control because I believe that it will prove to be a valuable addition to the existing means of controlling the economy.

9.30 p.m.

Mr. J. T. Price: I do not often allow myself the pleasure of striking a discordant note on this side of the Committee, but I am afraid that I must do so briefly on this occasion. I listened with great respect, as I always do, to the fertile speech of my hon. Friend the Member for Grimsby (Mr. Crosland).

Mr. John Diamond: It was a very good speech.

Mr. Price: I did not say that it was a bad speech. It was a a good speech. He stated in almost classical terms the academic professional view of economists on these matters. It is no part of my purpose this evening to argue the merits of these things, except to say that this completely avoids facing what I might call the constitutional issue. That issue is that the Executive, Her Majesty's Treasury, having been granted the powers in Clause 8 to impose this regulator of 10 per cent. either on Purchase Tax or duties according to their will and pleasure and according to the circumstances of the time, are not made accountable to give reasons why that step has been taken. That is why I take issue on the constitutional side as distinct from the economic side of the arguments which may be brought forward eloquently and persuasively by people such as my hon. Friend the Member for Grimsby.
I am in the rather rare position of sharing some of the views of my hon. Friend the Member for Ashfield (Mr Warbey), with whom I so often disagree on other issues. I certainly share with him disquiet—I put it no higher and shall not use the ugly word "suspicion"—about placing in the hands of this Executive such powers as these to take arbitrary action without giving an account of why they are taking it at the time they are taking it. That is something which I would not consider a prudent course because of my view of the Government's policy. This situation might arise if we accept the Chancellor's argument, used when he presented the

Budget so eloquently a few months ago, giving the reasons why he wanted these regulators, which we followed with interest and not without some sympathy in certain directions.
I shall not give him full praise, but I shall be honest and objective and give him modified praise. We understood his reasons and his reasoning. What we do not understand is that if the whole policy of the Government leads to a situation in which the country is faced with inflation, the Government, by the exercise of the powers asked for in the Clause, can wipe out the consequences of their evil policy or their faulty policy and put a 10 per cent. increase on duties or Purchase Tax. They can put it on the lot. If I read the Clause aright and understand the Queen's English correctly, with all the limitations which Parliamentary draftsmanship impose upon me, there is nothing to stop the Chancellor, if he thinks that an inflationary situation calls for the exercise of the regulators, imposing the 10 per cent. either on Purchase Tax or on duties, or on both as he chooses.
If a discrimination is open to them and if Purchase Tax were so manipulated to tide us over a difficult period, it could be argued that it would be the wrong course to increase indirect taxation and leave duties and other things as they were. If I am wrong in this I may be corrected, and I shall acknowledge that I have been wrong about it. At the moment, although I pay due respect to all the arguments for the granting of these powers, I cannot bring myself to trust any Executive—here I am quite impartial—with these powers because any Executive would to some extent abuse these powers if they were not answerable to Parliament for their actions.
I am opposed, to the limited extent of my knowledge, to the granting of these powers which would be exercised without the proper supervision of Parliament and without giving an account of the reasons which require the Chancellor to impose this 10 per cent. in a situation which he may wish to bring to an end.

Mr. H. Wilson: I am not rising with any idea that we should end the debate on the Question, "That the Clause stand part of the Bill", because this is one of the biggest powers ever given to a


Chancellor in time of peace. I shall be surprised if some of my hon. Friends do not wish to carry on the debate. I thought that it was right to rise and draw together some of the lines which have emerged in the debate, and to draw the attention of the Committee to some of the points which we consider of fundamental importance.
First, we are faced with this problem of regulators. We welcome the fact that the present Chancellor, the fifth of his line in my time at this Box, shows a little more awareness than any of his predecessors of the shortcomings of the monetary weapon as an economic regulator. He has not specifically said this. He has not disavowed this, but I think it is clear that the Chancellor, with the line he is taking on the regulator, is, at any rate by implication, admitting that the Radcliffe Committee was much nearer the bone than his predecessor was willing to recognise.
This is on the record, and the Committee can look up the various Motions which we have moved on the economic situation at various times. For years, right back to the days when the present Home Secretary was Chancellor, even before the 1955 election, we have moved Amendments to various economic Motions saying that the Government were placing excessive reliance on the monetary weapon. For many years that has been one of the main burdens of our criticism of Government policy.
This was particularly our view during the short reign of the present Minister of Aviation, whose reliance on the monetary weapon was pursued to almost lunatic proportions. I will not weary the Committee with the quotations I have given from the speeches he made and the Press statements he made at the time of the crisis of September, 1957, when he gave the impression that if only he could control the volume of money all would be well; prices would immediately respond to his system of controls; that he was going to make available only a certain amount of money in circulation, and that if wages took more of it there would be less for other things and that would cause unemployment. He said that with almost blatant crudity, but one thing he did was to set up the Radcliffe Committee.
When the Radcliffe Committee reported we had a full debate. I hope

that the present Chancellor will find time to read that debate. He will find it in HANSARD for 25th November, 1959. It was a valuable debate. Some of the bright new ideas which the President of the Board of Trade takes credit for announcing were put forward from this side of the House in that debate, particularly with regard to the encouragement of exports. It was a valuable debate, and we moved an Amendment to the Government's rather arid Motion to take note of the Radcliffe Report, saying that we welcomed it, and in particular certain sections of the Report with which I will not deal tonight because I would be out of order if I took that too far.
Our general attack on the Government has been that they have felt that with interest rate policy, with all the lurchings that this has caused, and with all the hardships and problems it has caused for local authorities, for mortgage holders and owner-occupiers, and in other ways, with some kind of control over the volume of credit by one means or another, they are able to rescue and stabilise our economy to enable us to continue to expand while yet enjoying reasonably stable prices.
In the event, of course, for most of the period when the monetary policy was at its height we did not have stable prices and we did not have growth. We had the worst of both worlds. Production was held down and in consequence costs rose. A further result was that for one reason or another prices kept going up and there was inflation, and so on.
When the Radcliffe Committee reported—I shall not weary the Committee with long quotations at this time of night, although I would be thoroughly justified in doing so in this debate—it made quite plain that that policy had failed. Its findings were contrary to all the speeches we had had from Conservative Chancellors, especially the Minister of Aviation, not to mention our old friend the Financial Secretary to the Treasury, whom I once called Rasputin because of his ability to influence successive Chancellors on these lines. At various times, he has advocated monetary policy. I never thought that his heart was in the job, but he did it with considerable elegance, even with an appearance of conviction.

Sir E. Boyle: Looking back at our happy debates together at the end at 1955, the right hon. Gentleman cannot accuse me of having neglected fiscal policy in some of our debates.

Mr. Wilson: No, but I recall a large number of economic debates when the hon. Gentleman put forward the case for over-reliance on monetary policy with all the vehement conviction of somebody who does not really believe in it. It was enough to convince many of his hon. Friends, although it did not convince us.
The judgment of the Radcliffe Committee was that, contrary to everything we had ever heard, financial policy was not the fine hand on the steering wheel or the gentle control of the stability of the economy, that all that it led to was lurchings and shudderings, and that if we have to use the motor car analogy that successive Chancellors have made tiresome, all that it leads to is a screeching of brakes at the corner, the burning of rubber and all the rest. We welcome the fact that the Chancellor has decided not to rely principally upon the monetary weapon.
One of the features to come from the Radcliffe Committee was the growing awareness of the efficacy of the hire-purchase weapon. Hon. and right hon. Members opposite won the last election by suddenly removing the credit squeeze, by a tremendous tax hand-out in the Budget that preceded the election and by their removal of the hire-purchase restrictions. They pulled out every stop in the organ to get a booming economy just before the election. Then, it got out of hand and immediately they imposed controls. After the election they put on the hire-purchase control with more vigour and confidence than they had used, for example, after 1955.
After 1955, when the poor old Home Secretary had overplayed his hand before the election, he had to come down and go through all the difficulties and the long, late-night sittings of an autumn Budget. That is why he is not Prime Minister. However, after the last election, the then Chancellor came along and in most gentlemanly fashion he reimposed the credit squeeze, he reimposed the hire-purchase controls and he raised Bank Rate. He did all those things. He

reversed practically every instrument that won the party opposite the election. As my hon. Friend the Member for Grimsby (Mr. Crosland) has pointed out, however, hire purchase created a great deal of lurchings of its own. Hire purchase is not a sensitive instrument. While we have complained that monetary policy was not sufficiently selective, the hire-purchase control is too selective, particularly in the geographical effects to which my hon. Friend has drawn attention.
So the Chancellor has decided that over-reliance on monetary policy and on hire purchase is wrong. Therefore, we are to have additional regulators which will not have to wait for the annual Budget timetable to be introduced. Thus we get the payroll tax, or powers to impose it, and we get this indirect taxation regulator.
Obviously, we cannot say anything tonight about the payroll tax, because we have not yet reached the appropriate Clause. While our speeches must remain in order, however, our minds can go far beyond your Rulings, Sir William, so that we can take into account the fact that in the Bill we are giving the Chancellor two important powers. We are glad, as I say, that the Chancellor has moved a little way from financial controls, although we should like him to have really faced the implications of the present economic situation. We wish that he had realised the necessity of expanding essential investment by the necessary physical controls. I shall not develop that now, Sir William. That debate is for another occasion.
9.45 p.m.
Having welcomed what the Chancellor has done in throwing over the arguments of some of his predecessors, I want now to express the concern which we on this side of the Committee feel at the way in which he is doing it. We do not intend to vote against the Clause standing part of the Bill, but that does not prevent us from expressing very great concern about it. Lest there be any doubt, I say now that we shall certainly oppose by every means open to us the payroll tax. That will come later.
On this Clause, we are deeply concerned, first, about the matter of Parliamentary control referred to by my hon.


Friend the Member for Ashfield (Mr. Warbey) and my hon. Friend the Member for Westhoughton (Mr. J. T. Price). We are giving the Chancellor powers which would make Gladstone turn in his grave. The total powers which the right hon. and learned Gentleman is to have to raise taxation without legislation under the two relevant Clauses amount to a revenue-raising power equal to an entire pre-war Budget. The Chancellor will have power to raise an amount of that size. Therefore, putting the matter now in terms not of either side of this Committee, the House of Commons must not concede such a power lightly. It is a very important power to be given to any Chancellor.
For one thing, one would imagine that the Chancellor would be likely to use this power in respect of indirect taxation when things get a little out of hand, when he has miscalculated in the Budget, when things turn a little awkward, perhaps, in the autumn, or when, for reasons quite outside his control or his power to forecast, things tend to speed up in one direction or another and an additional regulator is required.
Many of us feel that should that sort of thing happen a Chancellor of the Exchequer ought to come to the House of Commons with an autumn Budget. The right hon. Gentleman the Home Secretary was not averse to doing that. Let us consider for a moment what the Home Secretary did in the autumn of 1955. He had won an election on a false prospectus and a Budget which could not be sustained for more than a few weeks. At that time, the right hon. Gentleman had the honesty at any rate to come to the House and ask for fiscal powers in an autumn Budget. I think it is right, if that happens, particularly after an election, that the Chancellor should come and require legislation of that kind. Nevertheless, let us take into account the possibility that it might not be the result of a pre-election hand-out.
Let us consider a situation, for example, in which, for one reason or another, a foreign exchange crisis blows up. Such things are never very far away, as the Chancellor will agree. Sterling is going through a very difficult time just now. I can envisage the likelihood of the Chancellor using the power he ask for, and that it would be most

likely to occur, perhaps, in the autumn of any year when sterling came under pressure, for good or bad reasons. Sometimes, sterling comes under pressure for bad reasons and not for reasons which could be justified on economic grounds. That was so, I think, in 1957.
Under this Clause, we are to give the Chancellor power suddenly to cream off a great deal of revenue and to do it without Parliament even being called. The right hon. and learned Gentleman has given us certain assurances. He said, of course, that he could not imagine a situation in which Parliament would not be recalled. But Chancellor's assurances are not good enough in a matter like this. It would be possible for the present Chancellor of the Exchequer this year, or in any other year if the power is renewed, to introduce an additional £200 million of indirect taxation in, say, the first week of August. We have known sterling to go through a difficult time in August. In the ordinary course of events, Parliament would not be recalled until the end of October or early November. Under the provisions of the Bill, it would not be necessary to get Parliamentary ratification of the Chancellor's action for a further 28 days.
Obviously, we on this side, as guardians of Parliamentary control of the revenue-raising power, cannot accept that situation. I hope that hon. Members opposite, some of whom have made powerful speeches on this subject in the past few years, will be with us in this matter. I hope that the Chancellor himself will see the strength of our argument. We intend to move an Amendment at the appropriate place in the Bill to provide that, if this power is used, it requires Parliamentary ratification within seven days—not within seven Parliamentary days, but within seven days, meaning that Parliament must be recalled if it is not sitting.
There is also the possible abuse of this power by an unscrupulous Prime Minister. We never know. We might get an unscrupulous Prime Minister before this Parliament is out. I do not propose to give any tips on this. It would be an unrewarding pastime. What is more, it would be out of order. However, on the Second Reading of the Bill, I made one or two points about this. I said that we all know the Prime


Minister to be a man of high moral principles concerning elections, but that we have noticed that when elections came along there was a struggle for mastery in his mental make-up between the high principles which we have come to know so well and perhaps rather more earthy principles concerned with election winning, and that we in this Committee have a duty to protect his higher and more noble self against those earthy principles, supported, as they often are, by the blandishments of the Conservative Central Office and some of his less scrupulous colleagues.
That was on Second Reading. I said that we would consider what we could do to help the Prime Minister against these pressures and to keep him on that noble path which he always likes to follow when the law of the land stops him from doing anything else. That is why we propose to move an Amendment to exclude from the period during which this power can be used the period of the dissolution of Parliament, so that there will be no question of suddenly cutting taxes after Parliament has been dissolved.
So much for political temptation. I wish to raise one other general matter. I have said that it is possible that the Chancellor of the Exchequer might wish to use this power, shall we say, during a period of temporary foreign exchange crisis. One of the tragedies of foreign exchange crises in the past few years has been that they occur in such a way and for such reasons that a Chancellor's only apparent power to deal with them is under internal economic policy designed, if not to reduce purchasing power, at any rate to give the little gnomes of Zurich the impression that we are reducing purchasing power. Many policies, not least those of September, 1957, very damaging as they were to this country, were carried out not for their direct effect, but for their announcement effect overseas.
If there were a run on sterling this year or any other year for any reason—perhaps because of developments in South Africa or in other parts of the world—there is a very real possibility that the Chancellor will come along and say, "I had better take this action." What worries some of us is the essentially unjust way in which this would have to be done. What he would be doing would

be to increase the volume of indirect taxation, a point made by my hon. Friends the Members for Ashfield and Westhoughton. If the Chancellor decides that he must hold down purchasing power by fiscal measures, why should that be confined to indirect taxation which, by definition, is the most regressive form of taxation known to any Chancellor? If he is to do it, why should not he apply it to direct taxation as well?
I do not entirely agree with my hon. Friend the Member for Grimsby. I have checked up with those who know more than I do about the physical possibilities here. If the Chancellor decided in September this year, or in any other year, to use this power it could be applied to P.A.Y.E. in a matter of a few weeks. Admittedly, it could not be applied to Surtax. It could not be applied to Schedule D Income Tax, though the Chancellor will find that we shall propose certain measures for bringing Schedule D up-to-date in this matter of taxation. There is no reason why the Chancellor should not apply it to P.A.Y.E., and on the day he announces it say that he will at the end of the year catch up with Schedule D taxation or the Surtax appropriate for the same period. If he did, say on 5th October, halfway through the year, he could at the end of the year apply a rate of Income Tax for either Schedule D or the Surtax to the extent of half a year increase. I am not suggesting that he should be given power over Income Tax without reference to Parliament, but it seems unfair that he can do it with indirect taxation and could not do it with direct taxation.
Year after year we have been debating tax avoidance. It has taken up far too much of the time of the House of Commons simply because of the refusal of previous Chancellors to face the problem adequately. When we have debated it some of my hon. Friends and I have put forward the proposal that the Chancellor should have power, between Budgets, to stamp on any method of tax avoidance subject to review in the next Budget. This has been refused on the ground that it would be unfair, dictatorial and undemocratic. But the present Chancellor is taken the same power not against the dividend-strippers or the bond washers and all the crooks who have been defrauding the Revenue for years but against the housewives, and against the


beer drinkers who voted Tory because of a tax cut before the last election [Laughter.] Did they not? What was the purpose of it?
This power is taken against every family in the country who pays Purchase Tax. Why does the Chancellor refuse, and why has every other Chancellor refused, to use this inter-budgetary method of controlling tax avoidance and dealing with people who are enemies of the State—and let us make no mistake that they are enemies—and yet will use it for the first time now for this purpose?
I pass over the problems of uncertainty of trade, though many traders are concerned that this will lead to considerable uncertainty. I should like the Chancellor to deal with the question of how often he could use this power within one year. We are a little dubious, on reading the Measure, whether he could not use it one week and repeat it the next week. We think that probably he could not, but we should like to have the point clarified and I hope that he will deal with it.
To sum up, this is a very important power that we are handing to the Chancellor and I hope that no hon. Member, however anxious he is to get home, will relinquish his duty as far as this subject is concerned. We welcome the fact that the Chancellor has accepted the need for regulators other than monetary regulators. We are greatly concerned about Parliamentary control and we hope to put it right. If not, our attitude to this power may be very much changed during the later stages of the Bill.
We think that measures should be introduced to safeguard the present and future Prime Ministers from any temptations to which they might be subject by virtue of their official office. We think it extremely one-sided to apply this power to indirect taxation and not to direct taxation. We are a little concerned about its effect on uncertainty of trade, but because we welcome the fact that the present Chancellor is moving away from over-reliance on monetary policies to more effective regulators we do not propose to vote against the Clause standing part of the Bill. We may have a different attitude if we do not have acceptance of the view that we have put forward about Parliamentary control.

10.0 p.m.

The Chancellor of the Exchequer (Mr. Selwyn Lloyd): It may be for the convenience of the Committee if I intervene at this stage. I fully agree with the right hon. Member for Huyton (Mr. H. Wilson) and other hon. Members opposite about the importance of this Clause. I have never sought to pretend that it is a small thing to be slipped through as quickly as possible. I have always said that it is a Clause of very great importance and that the power given under it is a very great power for the Chancellor of the day to have. I have never tried to burke that issue.
So far as the purposes are concerned, I do not think that, after what has been said, it is really possible for any right hon. or hon. Member opposite to object to this Clause in principle because of the arguments put forward about the Bank Rate, the use of hire-purchase restrictions and all the rest of it and the criticism of monetary means.
I think that what the right hon. Gentleman said about his not asking his right hon. and hon. Friends to divide against this Clause was consistent with what he said, because I do not see how he could have asked them to divide after what he said about monetary means. I am not going to criticise the use of monetary means in managing the economy. I said in my Budget speech that I did not think that in the present circumstances they are adequate. They can be very useful and I think that the time may come when they will have to be used again, but I do not think that they are adequate by themselves.
There have been certain criticisms of this regulator. The first, I think, was that it could be used for political manipulation. Hon. Members opposite should not judge others by themselves. There is wishful thinking about it all. I do not think that the electorate are as easily fooled as the hon. Member for Ashfield (Mr. Warbey) thinks or, perhaps, hopes. They can see through things as easily as most people. Therefore, the idea that this regulator has been put into my Finance Bill to give the Government an additional means of fooling the electorate is not worthy of the right hon. Gentleman or other members of the Opposition.
The next point made—I am not sure that I understood it quite fully—was that it would be used if the country was threatened with a crisis. The whole point is to try to avoid a crisis, to use it to avoid a crisis occurring. The purpose of it is to ensure effective and corrective action by the Government in time.
The right hon. Gentleman talked about what, I think, is a very important point—the constitutional point about parliamentary control, the relative merits of an autumn Budget, and so on. I have tried to make it clear, at each stage, that I do not want to take control out of the hands of the House of Commons. Nevertheless, I think that we have to face the fact that the Executive of the day needs additional weapons for acting quickly. All the business of an autumn Budget, and so on, takes a great deal of time and there is no power for the Executive to act quickly.
I fully admit that it is a novel and a new power for which to ask. But I think it important that Parliament should be willing to give the Chancellor power to take speedy action in this way on these matters. When we come to debate the Third Schedule we can go into these matters in some considerable detail and I prefer not to anticipate the debate which I know that we are to have later on the Schedule. All I wish to say is that I recognise the importance of the constitutional point, and when we debate the Schedule I shall listen carefully to what the right hon. Gentleman and his hon. Friends have to say.

Mr. H. Wilson: To encourage the Chancellor in his thinking and preparation for that important debate, may I put this point to him? He has said that the Government are going to act quickly and that there is no time for an autumn Budget, and that sort of thing. Is it not a fact that if the Government had an autumn Budget they could act with as much speed as is provided for in the Bill?
Under the Provisional Collection of Taxes Act, if the Chancellor, under a Ways and Means Resolution, moved a Motion, it would take effect immediately. Is it not a fact that on the occasion of the autumn Budget, in 1955, the then

Chancellor announced six or seven days before that he was to have a Budget which gave long enough time to get the Revenue on the move?
Would not the right hon. and learned Gentleman be able to do that and is not the difference between an autumn Budget and what is proposed in the present Measure simply a question of the amount of trouble the Chancellor has to take to justify the use of the action he is taking?

Mr. Lloyd: I do not think that that is worthy of the right hon. Gentleman. I do not accept what he has said, nor do I accept that this is put forward to save the Chancellor trouble. It is necessary to have this power but I am quite prepared, when the time comes, to debate the constitutional aspects and the degree of control which Parliament exercises.
In answer to the point put to me by the hon. Member for Westhoughton (Mr. J. T. Price), there is no intention that there should be power to discriminate between the various duties affected. This is meant to be a flat rate fixed for all duties. There will be no power to discriminate, which was what, I think, was worrying the hon. Gentleman. This is meant to be a very simple and, in that sense, not a flexible instrument. Of course, there exists the power which has already been given to vary Purchase Tax. But this regulator is meant to operate as a flat rate affecting all duties.
The point has been raised whether I am asking for power to have more than one 10 per cent. variation in a year—

Mr. J. T. Price: I do not think that the right hon. and learned Gentleman can dispose of the first point as easily as that. As Clause 8 reads it is left open to the Chancellor, if he is so minded, to select—to impose a 10 per cent. on Purchase Tax and not on the other duties. If that is not his intention, I do not think that it is clearly expressed in the terminology of the Clause.

Mr. Lloyd: I am glad that the hon. Gentleman has put that point to me, because it is the intention that this shall be clear. I will look at the wording of the Clause to make absolutely certain that the purpose—that it should be a 10 per cent. or a 5 per cent. or a 2½ per cent. rate all round—is clear. There is


no attempt to discriminate between the duties.
The point I was about to make is that I am asking for power in this financial year to move to a maximum of 10 per cent. There could be two or three moves, say of 2½ per cent., with another 2½ per cent. and then 5 per cent. But the maximum is 10 per cent. There is no question of one move of 10 per cent. followed by another and then another. The bracket within which I am asking for power to move is £230 million minus or £230 million plus. It is a bracket of about £460 million—10 per cent. on or off; any movement would be within that bracket, not necessarily by the maximum each time but by some percentage—2½ per cent., 5 per cent., 7½ per cent.—whatever it may be, to a limit of 10 per cent. either way.

Mr. Jay: The Chancellor will still retain in force the power under the 1948 Act to raise or lower Purchase Tax. Therefore, my hon. Friend the Member for Westhoughton (Mr. J. T. Price) is correct to this extent, that it is still open to the Chancellor to use that power, and not the power which he is introducing in this Bill. He can still, without a Budget, alter Purchase Tax on its own. I do not think that the right hon. and learned Gentleman will disagree with that.

Mr. Lloyd: That is absolutely true, but that is a power which has already been given by Parliament: I think that it was given under a previous Administration. That power is not affected by this, I agree. But this regulator is meant within itself to be a flat rate for everything, with a maximum of 10 per cent. one way or the other.
I can quite see the disadvantage that this is new, that it gives great power to the Executive and does not give as much parliamentary control as anything put forward within the framework of the Budget does. But I think the advantage is that new regulators are required to deal with and control consumption at short notice. It might be due to the incompetence of the Government, of course, but even the right hon. Member for Huyton admitted that other circumstances might supervene which would mean that the Government would have to take action affecting consumption at short notice. We are coming to think more and more

that the solution to many of our economic problems is control of consumption. Unless we control consumption, it is very difficult to see that resources are available for investment and export.

Mr. Burden: One point about this that worries me is the power that already exists for raising Purchase Tax—and there is no ceiling on that power—plus the additional power which this Clause will give to raise a further 10 per cent. by means of this regulator. If it is a question of reducing consumption, the power given under the present Purchase Tax law would be very wide in itself without the use of the regulator.

Mr. Lloyd: There are certain powers at the moment. I do not accept that there is no ceiling. My recollection is that there is a ceiling—that one can only lift by a maximum of 50 per cent. However, I shall certainly examine that point.
The trouble about Purchase Tax is the same as the trouble about hire-purchase restrictions—it only strikes at a certain sector of the economy. My purpose now is to strike at a much broader field of consumption. The other advantage of the regulator is that it requires no new administrative machine, at a time when we talk a lot about scarce resources.
One of my main purposes is not to create a new machine, or new tax, or to create a lot of complications for people carrying on businesses. It is fairly evenly spread. It covers about £7,500 million worth of consumption expenditure. I think that 10 per cent. is a fairly small percentage, relatively, for which to ask powers to move.
There is much less uncertainty about this method than about others. If people believe that the Bank Rate is to be moved a great deal, or that hire-purchase restrictions are to be put on in a ferocious manner, or that Purchase Tax is to be moved to a large extent there will be more uncertainty. By taking this limit of 10 per cent., widely spread, there should be more confidence rather than less in the business community.
I am willing to go into further detail on the constitutional aspect, but, in principle, on the economic side, I am certain that it is right that the Government


should be given this power. I am glad that the right hon. Member for Huyton says that the Opposition do not intend to divide against the Clause, and I ask my hon. Friends to support it.

Dr. Alan Thompson: The wide range of views expressed on this side of the Committee shows the open-mindedness and tolerance on these benches. I see nothing wrong in the fact that some contradictory views have been expressed. This is an experiment. We are prepared to see how it works, and we reserve our right to criticise it later, but we understand that it may be a regulator that can help us when we become the Government, probably after the next General Election.
I am glad that we on this side have not dismissed this regulator out of hand. It seems to meet a point, as my right hon. Friend the Member for Huyton (Mr. H. Wilson) said in his excellent speech, that we have been urging so long—that of reducing our dependence on the Bank Rate. We have seen time and again the conflict between wanting to vary the Bank Rate for domestic purposes and being inhibited for international reasons. That conflict has bedevilled our economic history.
Over thirty years ago, when we imposed an interest rate to draw gold to London, that same interest rate almost destroyed our economy. It almost wrecked the coal industry, it created widespread strikes, and it plunged us into serious economic difficulties. Similarly, this regulator will reduce our dependence on changes in hire purchase regulations which so often injure selected industries. They injure some industries more than others for no very useful purpose.
I would not go all the way in accepting that this regulator removes uncertainty. I believe that the prospects of the regulator may still unsettle manufacturers' production plans. Another disadvantage of possible and frequent changes in indirect taxation is that they can lead, as we know, to forestalling actions. If the general situation seems to be inflationary, and newspaper articles comment on it and the general feeling in the business world is such, people may rush to buy to avoid the increase and thereby stimulate infla-

tion. If the economic climate seems to be deflationary, people may hold off purchasing in the hope of benefiting from remission, and may thereby give a new twist to the downward spiral.
10.15 p.m.
For non-durable goods, this is not important. I do not believe that people will stop smoking for a week because they think that because of the economic circumstances the price of cigarettes may go down a few pence the following week. Smoking is a habit which has defied all economic predictions. On the other hand, in the case of consumer durables, this is a serious point. After all, it is a matter of importance that a car which costs £800 may be £40 cheaper, and people may hold off buying if they expect this to happen. I think that the Chancellor might have thought about the possibility of a variation of the tax as a regulatory weapon being more effective if it was a low, flat sales tax imposed over a very wide range of goods, and perhaps even services. If so, the variations would be slight, and if he did this on a widely based range of goods and services, a much smaller increase would yield quite considerable amounts. In other words, if it were over a much wider range of goods, a worth while policy change which cut or added £100 million, would not change prices by more than say, 1 per cent.
A low general sales tax has been canvassed and discussed by economists in recent years. There are objections to it, but it is more attractive as an economic regulator. It secures the Chancellor's objectives much more efficiently and it can also be a massive revenue raiser. The problem is that, although we are using taxes as stabilisers—and the Chancellor is to be congratulated on moving adventurously into new territory—we are inheriting taxes designed to serve a whole series of different objectives. For instance, there are taxes which are higher on luxury goods than on essentials; taxes imposed because of the foreign currency situation; taxes for revenue raising—a whole rag bag of taxes imposed for all kinds of different objectives and at all kinds of rates. Now we are to have a tax as a stabiliser.
It is true that high rates of taxes on luxury goods, which is discriminatory taxation, satisfy many criteria of social


equality, with which we are concerned on this side of the Committee, but they do not always satisfy the employment criterion. Although an industry produces luxury goods, the workers in that industry are not all luxury goods consumers, but if their employment is hit by a tax on the goods which they are producing, because of objectives based on social equality, the employment criterion, with which we on this side are so rightly concerned, is likely to be infringed.
Considering this whole question of taxes as stabilisers, we are led to the conclusion that the best kinds of stabilisers in the taxation system are those which give a built-in flexibility. This is helped by one or two characteristics. First, the tendency for Government receipts to decline or rise more than income declines or rises. I want to make a point here which has been made by some of my hon. Friends. Where progressive Income Tax is an important source of revenue, this in itself acts as a pretty effective compensating mechanism, because as inflation automatically carries more people into the higher incomes, it also automatically increases the proportion of their taxation.

The Deputy-Chairman: Order. I hope the hon. Member will restrict his argument to the Question, "That the Clause stand part of the Bill."

Dr. Thompson: With great respect, Sir William, I am merely commenting on some of the arguments put forward by the Financial Secretary and some of my hon. Friends, but I will note that point.
In this sense, the truly effective foolproof safeguard against inflation is not this tax but a progressive Income Tax, and in that context, which was discussed at great length by my hon. Friend the Member for Ashfield (Mr. Warbey), we on this side of the Committee would feel happier about the tax proposed in this Clause if it were in the context of a really progressive taxation policy.

Mr. Diamond: I do not want to detain the Committee long, because I suspect that everybody wants to go home fairly early. My right hon. Friend said that he did not wish to curtail the debate, which is on a very important topic.
With the greatest possible deference, I want to call the Chancellor's mind back to some of the things which he said and to ask him whether he is sure about them. The first point with which I am concerned is that of flexibility. I support the Clause on the ground that it is a planning instrument, and a planning instrument is the better the more flexible it is. It is a test of the flexibility on this side of the Committee that we are prepared to support the Clause, because it is a good thing being done by the wrong Government at the wrong time and in the wrong context.
What has been argued against many other economic measures, particularly Bank Rate, is their complete inflexibility—that is to say, their effects are over such a broad front. I therefore say that if we are to have this instrument, then we should have as good an instrument as we can fashion. We intend to trust the Tory Government to use it, and there is therefore no sense in giving them a bad instrument. Let us give the Government as good an instrument as possible—and this instrument will be the better if it is the more flexible.
As the Chancellor read the Clause—and I am not sure that he is right—he is making it less flexible than I want it to be, and I therefore hope that it will be possible for him to interpret it differently. As I read it, the Clause does not eliminate the powers of 1948 and 1949 affecting Purchase Tax. There is nothing in the Schedule which withdraws those relevant Clauses. The Chancellor said that his intention is to do everything, including Purchase Tax, in one fell swoop at the same rate, but he cannot bind himself to do that if that is not the law which he is introducing.
I suggest to him that he should look at it again on the basis of what the law will be if we pass the Bill in its present form. He will be able to do three things. First, he will be able to increase everything flat; secondly, he will be able to increase or reduce Purchase Tax alone; and, thirdly, he will be able to increase or reduce Purchase Tax at one rate and change the other taxes at a different rate.

Mr. J. T. Price: That is what I said.

Mr. Diamond: My hon. Friend is right. I am stressing it particularly because I want him to be right and because I want the power to be more flexible.
I can well understand the situation in which the Chancellor might wish to make use of this planning instrument. He might wish to use a deflationary pressure, for example, but feel that if he used it in its broadest sense it would bring certain injustices with it. This is an inevitable result of a wide planning system. He might protect some of those who were suffering injustice if he had a little greater flexibility than that for which he is asking. He is asking for a little flexibility because the less flexibility he has, the less responsibility he has; and the less he has to consider whether he should work over the whole field or over part of the field if he thinks that he has power to work only on the whole field at any one time.
I suggest that he could remove some of the possible injustice if, for example, he could raise all the taxes referred to in the Clause by, say, the full 10 per cent., and then, having increased Purchase Tax by the one overall percentage, the following day reduce it on necessities by 5 per cent., 10 per cent. or 15 per cent.—whatever the figure was—up to the total figure provided. That would be a great advantage, and would make this a more flexible instrument.
If I cannot persuade the Chancellor that this would be a more flexible instrument I cannot persuade him that he would want to use it if he has said that he does not, but I ask him to consider whether he is right in what he has told the Committee. I suggest that his powers are much more flexible than he has said, and that he could use the existing Purchase Tax powers which, in themselves, as far as I can recollect, do not require all the different categories to be raised by exactly the same amount.
One cannot alter within a category, but one need not raise or reduce each category by the same amount as the last one. I see that I am getting some support for that point of view. There is, therefore, some flexibility in the present Purchase Tax powers, and the Chancellor has agreed by nodding that there is nothing in the Bill that reduces those Purchase Tax powers. He is, therefore, adding to them.
I should also like him to consider a little more carefully whether he was quite right in saying that he could make only a 10 per cent. increase in the year. I am sure that that is his intention, and I am sure that, having said that, as long as he is Chancellor it is all that he would do, but I would ask him to read the words in the Clause that say so. They may be there, but I cannot find them. As far as I read the Clause it says that he has power to introduce an Order and that an Order shall not exceed 10 per cent.; the variation shall not exceed 10 per cent.—

Mr. Selwyn Lloyd: During the period.

Mr. Diamond: Yes, one Order, and the period is presumably from the beginning of one August to the beginning of August in the next year—but one Order. He knows that he will not necessarily be limited to one Order. There is nothing to prevent him, as he has told us, from putting it up by 2½ per cent. one week, by 2½ per cent. a period later, and reducing it by 7½ per cent. a period even later.
The right hon. and learned Gentleman is asking for this flexibility. I agree that it would be troublesome and inconvenient if he did it too often, but there should be in his mind the power to introduce more than one Order—several Orders, in fact. If there are to be several Orders, either we have to say that the total cumulative effect has to be within these extreme ranges of 10 per cent. one way or the other—I am not a lawyer, and do not read that in the Bill, and I know that some of my hon. Friends have the same difficulty—or we have to express more clearly that we have the right to introduce more than one Order. I ask the Chancellor to give further consideration to those matters.
A material point is the relationship between direct and indirect taxation. Of course, all of us on this side, in particular, are very anxious about giving the Chancellor powers giving the right to increase indirect taxation, to increase regressive taxation, and to give the power to make the poor man's burden proportionately larger without doing anything at all in the other sphere of carrying burdens. My right hon. Friend the Member for Huyton (Mr. H. Wilson) discussed the possibility of compensating for this by taxing under P.A.Y.E.
It is a possibility, but I cannot see it. I cannot see the possibility of selecting P.A.Y.E. alone as a means of increasing direct taxation under this or a similar regulator and leaving Surtax and Schedule D unchanged. The effect of that would be to accentuate the difficulty of which I am complaining. The effect would be to increase the burden paid by the poor man and to leave the burden paid by the rich man untouched. If the Surtax payer is to be called on to pay no more at the time, it is no compensation to the man who is paying more for his cigarettes and everything else that he should be called upon to suffer more each week by deduction under P.A.Y.E.
10.30 p.m.
These generalisations are a little vague and the line cannot necessarily be drawn precisely. I cannot see that this is a satisfactory solution to the problem at present. The problem is a very real one. The difficulty we are all in is that the Clause is one under which the right is being given to the Executive to increase the poor man's beer, smokes, and so on, by 10 per cent. at a time when about 50 per cent. has been knocked off Surtax in one fell swoop. We have not reached that Clause yet, but that is the background of the Bill.
I want to present this in its truest aspect, which relates to the question of Parliamentary control. My right hon. Friend said that we require full Parliamentary control, and the Chancellor of the Exchequer has agreed with that. We require full Parliamentary control, consistent with acting with the necessary speed between Budgets. I go a little further and inquire when the Chancellor thinks he is likely to make use of this regulator. A good deal of discussion is going on at present as to whether the Chancellor will use this control very shortly. The discussion centres on the fact that unemployment is at a very low rate indeed. There are various other evidences of inflationary pressure. The suggestion being made in many quarters is that the Chancellor of the Exchequer will not wait long before using this regulator.
It is one thing for a Chancellor, when presenting a Budget, to say, "I want good planning machinery in order to protect the economy". It is quite a different thing for a Chancellor to say to the House

of Commons, "I am presenting a Budget under which a fantastic reduction is being made in Surtax. I have not the guts in the same Budget to increase indirect taxation, because there would be a revolution if I did the two at the same time. I shall therefore postpone the increase in indirect taxation and cover it up by taking power in this Bill and introduce it a little later".
I do not know what is in the right hon. and learned Gentleman's mind. I do not attempt to read people's minds. It is a fruitless occupation. However, we shall be able to judge this by the length of time which elapses between the Chancellor taking this power and the time he acts. There will be no justification for the right hon. and learned Gentleman taking the power to do this by Statutory Instrument if he plans to do it in the near future. If that is the intention, he could without the loss of any time ask for full powers and introduce a Clause doing the very thing he wants to do in this Finance Bill. There would be no loss of time and no problem if he did that, if he is considering an increase by this method between now and the end of July. The Bill will not become law before the beginning or the middle of July. Therefore, no waste of time would be involved.
Our fears are that there is a possibility of some unsatisfactory method of increasing indirect taxation only a little later than the time at which direct taxation is being eased by this vast reduction in Surtax. We hope that the right hon. and learned Gentleman will be able to allay our fears by assuring us that he has no intention of making use of these powers so soon. If he has that intention, he could do it just as satisfactorily by including it in the Bill. This is the point which is worrying so many of us and why so many of us are anxious to find some method whereby direct taxation could be brought into the net as well as indirect taxation. I agree with my right hon. Friend that this is a planning instrument and a new idea. Socialists welcome new ideas and planning instruments.

Mr. David Weitzman: I desire to say only a few words on the question of flexibility and the interpretation which I understand the Chancellor is putting on the words in this Clause. As I read


it, the Chancellor is right in saying that he is restricted in the period in respect of which the Clause has effect and the total limit of 10 per cent., but I cannot understand why he takes up the attitude that his intention in this Clause is to apply the regulator to every duty of Customs and Excise and Purchase Tax at the same time.
I know he will look at the words of the Clause carefully, but as I read them it seems that there is provision in the Clause for flexibility. In subsection (2), after (b), the words are:
the liability to duty or right to drawback, rebate or allowance shall be adjusted by the addition or deduction, as may be prescribed,
It seems perfectly clear on the reading of that subsection that the Chancellor, if he wishes, can merely apply this regulator to one or the other of the duties, either to the duty of Customs or of Excise or to Purchase Tax. I respectfully suggest that if he looks at the wording he will find that that is a correct interpretation of the meaning of the subsection.

If so, I agree very much with what my hon. Friend the Member for Gloucester (Mr. Diamond) said, that a good case could be made for flexibility in that direction.
I have listened to the whole debate, and I was very much impressed by the constitutional danger of the great and unique right given to the Chancellor for the first time by this subsection. Something was said by my right hon. Friend the Member for Huyton (Mr. H. Wilson) about bringing in an autumn Budget, but there is another suggestion. Why cannot the right be given subject to Parliament approving the measure within seven days? That seems a way in which it could be done without any difficulty or delay. I hope that the Chancellor will consider very carefully this most important constitutional point.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Fourth Schedule agreed to.

Clause 9.—(CHARGE OF INCOME TAX FOR 1961–62.)

Motion made, and Question proposed, That the Clause stand part of the Bill.

Mr. Douglas Houghton: I shall not detain the Committee for more than a few minutes, but there are one or two points which I should like cleared up about the form and purpose of this Clause, particularly as associated with Clause 10. Clause 9 does two things. It fixes the standard rate of Income Tax for the financial year 1961–62 and also the rates of Surtax for 1961–62. It says that the rates of Surtax for the year 1961–62 shall be the same as for the year 1960–61. Clause 10 then fixes the rates for the year 1960–61 by saying that they shall be the same as for the year 1959–60.
In a speech which I made on Second Reading of the Bill I said that it was both novel and unnecessary to fix the rates of Surtax for two years in the same Finance Bill. I have been doing some research to see what was the form of Sections of previous Finance Acts dealing with the standard rate of Income Tax and the rates of Surtax. I find that in Section 12 of the Finance Act, 1958, the standard rate of Income Tax was fixed but that the rates of Surtax for the year 1958–59 were to be
as Parliament may hereafter determine.
But the following Section—Section 13—settled the rates of Surtax for the year 1957–58, so that in that year the rates of Surtax for the previous financial year were settled but the rates of Surtax were left for settlement
as Parliament may hereafter determine.
I find that in 1959, Clauses in precisely similar form to those in the Bill now before us were introduced, and in the Finance Act, 1959, Surtax was fixed for two years at the same time whereas in 1958 it had been fixed only for one year. But in the Finance Act, 1960, it was unnecessary to fix the rates of Surtax at all because the rates of Surtax for the year 1959–60 had been dealt with in the Finance Act, 1959.
To sum all that up amounts to the fact that I was wrong in saying that Clauses 9 and 10 taken together were

novel. Clauses in this form were, in fact, introduced for the first time in 1959. Curiously enough, there was no debate during the Committee stage of the 1959 Finance Bill on this novel form of two Clauses which, added together, fixed the rates of Surtax for two years running. I notice that it was rather late at night. The Clauses concerned were ordered to stand part of the Bill without any debate whatsoever.
Although, therefore, I must withdraw the suggestion that Clause 9 taken together with Clause 10 constitutes a novelty in our Finance Bills, I still maintain that there is no necessity to deal with the matter in this way. Why it was done in 1959, my researches have not revealed, but there is certainly no need to do it as far as I can tell, because for years prior to 1959 the previous custom was followed in Finance Bills.
Clause 9 of the Bill is therefore now a paving Clause to the reliefs which are to be given under Clause 11. Clause 9 deals with the rates of Surtax for the year 1961–62 and Clause 11 provides for reliefs from Surtax for that same year.
10.45 p.m.
I can understand, therefore, that in a Bill in which it is proposed to introduce reliefs from Surtax for the year 1961–62 it is obviously necessary to determine the rates of Surtax from which the reliefs are to be given. To that extent, therefore, the form of Clause 9, in association with Clause 11, is clearly logical, though I repeat that there is no need in this Bill to provide either for the rates or for the reliefs from Surtax for the year 1961–62. That could be done in the Finance Bill of 1962.
Perhaps the Financial Secretary, who has a phenomenal memory of these matters, will be able to explain to the Committee why the 1959 formula is being repeated in the 1961 Bill. As I have said, I can see that there is perhaps a more pressing reason for adopting the form and purpose of Clause 9 this year because of the additional provisions which Clause 11 is to make when Surtax comes to be levied for the year 1961–62.
We had it in mind to take offence at Clause 9 sufficiently to vote against it, but, having discovered that this form was used in 1959, without the same ulterior motive that is clearly in the mind of


the Government in this Bill because they want to provide reliefs from Surtax for the year 1961–62 and are therefore concerned with more than fixing the rates, it seems to have provided a precedent for the form which is used in Clause 9.
That was the point I wish to raise. There have been occasions when the corresponding Clause in earlier Finance Bills has been the occasion for hours of debate, especially from the benches opposite, on the evils of the high rate of taxation. When I first came to the House in 1949, I came just in time for the Budget and Finance Bill of that year, a Labour Government being then in office. I was much more conscientious then than I am now, and I sat through the debates on the Finance Bill. I am much more selective now. I remember sitting here hour after hour, believing it to be my duty to listen to every word that was said on a Finance Bill. We had many hours of complaints about the evils of the high rates of taxation, the high level of Government expenditure, and the road to ruin generally.
Now, of course, although the rates of taxation are superficially lower, the total yield of taxation is enormously greater, public expenditure is correspondingly higher, and yet if there is to be any debate on Clause 9 this evening it is obviously left to these benches to make it.
Having had that backward look and nostalgic reference to occasions when the corresponding Clause in earlier Finance Bills was much more contentious that this one appears to be, I hope that the Financial Secretary will be able to throw light on the chopping and changing of form of this and its associated Clause in earlier Finance Bills and this one, which to me becomes curiouser and curiouser.

Sir E. Boyle: I think that I can answer the hon. Gentleman's question. It is true, as he says, that in past years we have sometimes had a lively debate on the Income Tax Clause. I remember the Finance Bill of 1951. Possibly part of the reason was that in 1950 the standard rate of Income Tax was 9s. in the £, and in 1951 it was 9s. 6d. in the £, whereas now it is only 7s. 9d. Having said that, I agree that to debate this Clause without the presence of my

hon. Friend the Member for Kidderminster (Mr. Nabarro) seems to mark quite a change from last year.
The hon. Gentleman is right when he says that normally if we have no change in the standard rate the rates of Surtax for a particular year are not fixed until the Finance Bill for the following year. For instance, Surtax for 1960–61, payable on 1st January next year, will be charged at rates which are being fixed by Clause 10 of this year's Bill. I agree with the hon. Member that, in a way, this part of the Bill is drafted in a slightly peculiar way, because half of Clause 9 is, as it were, a paving Clause to Clause 11, with Clause 10 sandwiched in the middle. The point had not escaped me, but I do not quite see, assuming that we draft Clause 9 in this way, how that was to be avoided.
As the hon. Member has rightly said, however, there is some precedent for the Income Tax Clause being drafted in this form. When the standard rate was reduced in 1959 and also, I think it will be found, when it was reduced in 1955, Parliament was invited to approve the corresponding Surtax rates at the same time so as to make quite plain the total tax burden proposed for personal incomes under the new rates.
In the same way, my right hon. and learned Friend feels that, in view of the importance of the reliefs in Clause 11 in this year's Bill, it is right here and now to ask Parliament to fix the 1961–62 Surtax rates, so that the intended effect of the new reliefs can be clearly brought out. That means that taxpayers currently liable to Surtax, and those potentially liable to it, can have the whole picture before them, and the value of the reliefs in Clause 11 as an incentive will surely be greater if those affected know just what benefit they can expect to receive.
Next week, I have no doubt, we shall debate with considerable vigour the merits of Clause 11, but when a major change is being made in direct taxation, either through a large reduction in the standard rate or through, as in this case, a major reform of Surtax, in those conditions there is something to be said for the Income Tax Clause being drafted in this way, so that those who are, and those who may become, affected can know here and now just where they stand.

Mr. Jay: It would be quite possible, would it, for next summer's Finance Bill to reverse the Surtax reliefs announced by the Chancellor in this year's Budget, and they are in that sense purely contingent and hypothetical?

Sir E. Boyle: That phrase "Surtax reliefs" is a little imprecise. There are the Surtax rates which we are laying down now. In a sense, Clause 11 is something on its own. We are not debating it tonight, but it contains certain proposals which it is intended to apply to the Surtax rates. In a sense, therefore, it is something on its own. Therefore, I do not think that there is anything incorrect or contingent about the procedure which we propose to follow this year.

Mr. Mitchison: If that is so, why does the sidenote label Clause 11 "Surtax: reliefs for earned income"? If it does not mean relief, why put it in the side-note?

Sir E. Boyle: There is nothing wrong about the word "reliefs" in this context. Clause 11 begins by saying that
For the purpose of charging surtax for the year 1961–62 or any subsequent year of assessment,
certain particular considerations shall be taken into account. That is, in a sense, a Clause on its own, quite distinct from Clauses 9 and 10.

Mr. Mitchison: The hon. Gentleman might understand the difference between that and a relief, but I do not. I should have thought that what it meant was that for the purpose of charging Surtax, certain reliefs are to be allowed.

Sir E. Boyle: I was dealing with the point, made by the right hon. Member for Battersea, North (Mr. Jay), of whether to some extent our arrangements this year are contingent. We shall pass Clause 11 this year. I have no doubt that it will be possible notionally for the House to pass a quite new Clause on the same lines as Clause 11 next year if it is so minded, but that does not in any way make it incorrect for us to pass the present Clause in the form in which it is drafted in the Bill.

Mr. Jay: Would it be correct, therefore, to say that whether or not the Surtax changes announced by the Chancellor in the Budget this year take

effect depends on next year's Finance Bill rather than on this one?

Sir E. Boyle: I do not, with respect, think that that is quite correct. The Surtax chargeable as proposed in the Finance Bill for 1961–62 will be reduced in many cases through the operation of the new reliefs for earnings under Clause 11. I was suggesting to the Committee only that there is an important distinction between the basic rates of Surtax chargeable and the new reliefs for earnings contained in Clause 11.

Mr. Diamond: To pursue that a moment, I think that my hon. and learned Friend, the Member for Kettering (Mr. Mitchison) may have been concerned with rates more than with reliefs, although he included both words in his question. To leave Clause 11 and the reliefs under it for the moment and to deal with Clause 9 and the rates there, is not my right hon. Friend the Member for Battersea, North (Mr. Jay) absolutely right, and am I not right, in saying that whether or not the rates proposed apply depends entirely on next year's Finance Bill? If that is so, whether it be a little abnormal or very abnormal, ought not one to bear it in mind and accept that the total result, the total liability to Surtax of an individual, cannot be finally ascertained until next year's Finance Bill is passed through the House?

Sir E. Boyle: I can give the unqualified assurance that the Clause in next year's Finance Bill corresponding to Clause 10 of this year's Finance Bill—I think this is the point the hon. Member for Gloucester (Mr. Diamond) has in mind—will be in no way at all inconsistent with Clause 9 of this year's Finance Bill.

Question put and agreed to.

Clause ordered to stand part of the Bill.

Clause 10 ordered to stand part of the Bill.

Mr. H. Wilson: I beg to move,
That the Chairman do report Progress and ask leave to sit again.
The Chancellor is not here at the moment, but I am sure that the Financial Secretary has authority to express enthusiastic support for the Motion I move. We have made remarkable progress with the Finance Bill today. We have got through all the vehicle duties,


the Schedule, and two Clauses of, perhaps, lesser importance but on which time could have been spent, and we have dealt with the economic regulator in a matter of an hour or two in the quiet of the evening, handing to the Chancellor powers such as have never been handed to a Chancellor in time of peace before. If there is any criticism of today's proceedings, it ought to be directed at the Opposition for allowing such major power to go through so quickly.
We start again next Wednesday, I think. Since we have got through Clauses 9 and 10, I should tell the Chancellor, who is greatly experienced in many things but not, perhaps, in Finance Bills yet, that we got through Clauses 9 and 10 probably more quickly than at any time since the war, with the exception of 1959, which was the time my hon. Friend the Member for Sowerby (Mr. Houghton) had in mind, I think, a few minutes ago. I think that we ought to leave it there and go right into Surtax next Wednesday. I do not want to mislead the right hon. and learned Gentleman. I should regard it as very surprising if we had the same weight of productivity of Clauses per hour next Wednesday.

Mr. Selwyn Lloyd: One of the charms of the right hon. Member for Huyton (Mr. H. Wilson) is that, when he makes a speech, he opens up a great number of points capable of argument. I propose to resist the temptation to deal with some of his suggestions. I agree with the right hon. Gentleman. I do not think I can possibly complain of the progress we have made today. In the circumstances, I accept the Motion he has moved.

Question put and agreed to.

Committee report Progress; to sit again Tomorrow.

Orders of the Day — KING EDWARD VI GRAMMAR SCHOOL, TOTNES

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Finlay.]

11.0 p.m.

Mr. Ray Mawby: In October of last year I was invited by the Governors to visit the King Edward VI Grammar School at Totnes. I was shown round by the headmaster, the chairman and a number of governors, including the then Mayor of Totnes, himself an old boy of the school. I found the school which was built originally as a boarding school, in the main street in Totnes. The boys are no longer boarded but a much larger number are being taught than the facilities allow. Heating is by gas fires and the boys are so cramped for space that I should imagine that the boy nearest to the fire is half-cooked. Outdoor clothing is hung in the class rooms and I can imagine the pools of water and the steamy atmosphere which must result on a wet day.
The toilet accommodation is inadequate and the gymnasium is an old chapel some distance up the main street. Changing facilities in the chapel are non-existent. The boys must change at the school and go up the hill and across the main road wearing their gym clothes. The chemical laboratory is completely inadequate and I fail to see how the most brilliant scientist could teach science in such conditions.
Because it is in the centre of the main street, there is no adequate space to extend the school in the way required to meet modern conditions. It was therefore decided that a new school should be built to replace both this school and the girls' school, which is not such an old building. The question which everyone concerned is asking is, "When?"
Following my visit to the school I wrote to my hon. Friend the Parliamentary Secretary to the Ministry of Education and in his reply of 14th November he said that the county authorities intended to include this project in the proposals for 1963–64. They also proposed to do what they could to improve the conditions in the existing school. I wrote again pointing out that


money spent on improvements to the school likely to be pulled down would be wasted. In his reply of 24th November my hon. Friend agreed that,
the more we spend in patching up, the longer the replacement of old and inadequate buildings will be delayed.
On 28th November the chairman of the governors informed me that the chairman of the county education committee and the county education officer had inspected the school and had expressed concern. I accompanied them to the Ministry on 7th December, where we met an official and a schools inspector. While not wishing to betray any confidence, I may say that my impression upon leaving was that all those present were seized of this problem and were prepared to treat it as urgent. However, on 18th March of this year I received a letter from the mayor containing the news that the governors had been told that funds would not be available until 1965–66, and the committee of the governors had adopted a resolution
viewing with great concern any suggestion to delay the building beyond 1963–65 as promised.
This was confirmed by the Minister in reply to a Question by me on 4th May. However, in answer to my supplementary question he said:
I agree that the school has poor buildings, but it is for the authority to decide its priorities."—[OFFICIAL REPORT, 4th May, 1961; Vol. 639, c. 1574.]
It is not my job, nor is it my intention, to apportion blame for the hold-up. All that concerns me is whether another generation of boys, fitted for and deserving of a grammar school education, is to be condemned to receive it under the present unsatisfactory conditions.
I am informed that the school has recently been inspected, but my hon. Friend the Parliamentary Secretary may not yet be in a position to comment upon the report. I beg him, however, to give the decision his closest attention, because I believe that this is a special case which requires special attention.

11.5 p.m.

The Parliamentary Secretary to the Ministry of Education (Mr. Kenneth Thompson): I am grateful to my hon. Friend the Member for Totnes (Mr. Mawby) for bringing forward this matter and providing us with an opportunity to

discuss what is, I am sorry to say, characteristic of a number of the problems my Department has to face at the present time.
I should also like to take the opportunity to pay tribute to the zeal and persistence with which he has pursued this matter over quite a long time. I hope that his constituents will not feel that such delays and hold-ups as there may have been in the matter are in any way attributable to lack of effort on his part. That would be far from the truth. No hon. Member could have represented his constituents' interests with greater forcefulness than has been the case with my hon. Friend.
I am glad also to have the opportunity to explain once again how it comes about that my right hon. Friend the Minister of Education finds himself so frequently in this kind of difficulty. It is certainly not of his choosing, and it is one which he tries to avoid so far as he can. We are faced, in the Ministry, with the very difficult job of apportioning a limited amount of money for school building projects among a great number of applications for funds for this purpose, many of which are rightly of a very high priority and yet many of which, by nature of the limited amount of money available, at the end of the day must find themselves excluded from one year's building programme or another.
We invite authorities to submit their proposals to us year by year. We have reached the stage when we are asking them to submit their programmes one, two or more years in advance in order to get a long view of likely demands, and to give them a long time to prepare their plans and the opportunity to get their schools on the ground as soon as possible when each new building year arrives. First, we have been compelled, in the years since the war, including the early years of this five-year building programme, to give priority to all projects which are designed to provide new school accommodation either in the new towns or in new housing estates. That is an overriding and absolute priority to which we must devote the first of our resources year by year. Secondly, we are compelled, by the terms of the 1944 act, which is the basis upon which all our work rests, to provide resources to complete the reorganisation of schools


into primary and secondary schools, so that all children can get the education appropriate to their age. Thirdly, as a result of the outline plans that the 1958 White Paper described in detail, we give most of what is left of the resources to providing for the improvement of existing secondary schools.
I come now to Devonshire. I hope that my hon. Friend will not think me wrong when I claim that Devonshire has had a fair share of the available resources over the years—about £400,000 a year for new building projects in the county. I know that is not enough. I appreciate that. No sum, whatever it might be, would ever be enough to meet all the needs of every single one of the 146 education authorities with whom our business is concerned.
Nevertheless, it is quite an appreciable sum. This county, as it happens, has not had a great deal of demand for new additional school places, for it has not been an area which has been receiving large increases of population. Devonshire also, by virtue of the fact that it had an efficient and zealous education authority in the years before the war, managed to provide itself with school plant which meant that, when we came to the post-war stage, it had not great demands for complete reorganisation of its schools into secondary and primary, so that the greater part of the school building programme carried out by the Devon authority in recent years has been for the improvement of existing secondary schools.
However, this school is bad, and is housed in inadequate and unsatisfactory premises. I do not dissent from a word that my hon. Friend has said in his description of the premises. I think that he would want me to pay tribute to the staff for the excellence of the work they do, not only on its merits, but particularly in the light of the circumstances in which the work is performed. This I do gladly. The school has quite a good record, and I am happy to acknowledge that from this Dispatch Box.
However, this school is not the worst, and here we come to the question of allocating priorities within priorities. Devon has other secondary schools which have made, so far, a greater and more clamant call on the resources of

the county. The local education authority must decide, subject to agreement with my Department, what its priorities shall be, and there is a great deal of discussion and "to-ing and fro-ing" between my Department and the local education authority until agreement is reached. Up to now, other school improvement projects have taken a priority above this school.
We now come to the point of deciding what is to happen in the immediate future. There are still other schools in the county which, however narrowly, will come in front of the King Edward VI School in any list of priorities, in the programme for 1963–65. I know that does not give the governors or the local education authority any pleasure or satisfaction. I know that they only reluctantly accept that as a judgment on the situation. Nevertheless, the evidence before me leads me to accept it as a fair conclusion. The local education authority and the governors have now decided—and only recently—that this school should be replaced jointly with the replacement of the girls' grammar school, and that there should be built instead of the two, one three-form entry mixed grammar school, which will cost about £200,000, and I am sorry to say that this sum cannot be found out of the reserves available to my Department or from the share of Devon until, at the earliest, 1965–66.
I understand that it is the intention of the local education authority at present that this should be the number one priority on such a list, and no one in my Department would dissent from that as a way of dealing with the problem. I would hope that the local education authority, having already earmarked the site, I understand, would have its plans ready, discussed with my Department, and agreed, so far as possible, so that as soon as we get to the stage of deciding how the projects for 1965–66 shall be slotted into the actual building operations, it would be ready immediately to go ahead.
I realise that this will not give much satisfaction to my hon. Friend or to the people of Totnes and district. I very much hope, however, that they will see that the conclusion I offer has not been reached without close examination of all the facts and possibilities. A good


deal of money—about £7,000—has been spent in recent times in trying to improve the immediate working machinery of the school. I would not for a moment use any pressure on the authority to try to spend more if the school is to be completely replaced, but I would hope that by the continued skilful and intelligent use of such resources as the school has, it may be possible to bridge this gap without inflicting too great hardship on the staff or pupils, and that the school will continue to perform well until it is properly replaced by a new building.
Nothing will be lacking in my Department to see that all the necessary preparations go forward as efficiently as possible and as far as possible so that by the time that it gets into its building programme in 1965–66 everything will be ready for a prompt start. I hope that my hon. Friend will accept that assurance as being in the best interests of the children in this area.

Question put and agreed to.

Adjourned accordingly at a quarter past Eleven o'clock.